Category: 
24/01/2009
The struggling bank may see as much as 10 billion pounds of cash from the government to ramp up mortgage lending. The Treasury has yet to make a final decision, which may also see the bank hiring new staff. Spokesmen for the Treasury and Northern Rock, which is due to unveil a new business plan in the next few weeks, could not immediately be reached for comment.
Northern Rock the first British casualty of the credit crunch, revealed that it had been forced to seek emergency support from the Bank of England in September 2007. The bank has been nationalized since early 2008 after attempts to find a private sector buyer fell through. Northern Rock has been shrinking its mortgage book and focusing on repaying a government loan since its nationalisation.
5 billion pounds of new equity would allow Northern Rock to write about 50 billion pounds of new lending, providing the capital is not eroded by bad debts. Could this be what the UK housing market is waiting for?
If Northern Rock offer sensible loans at resonable interest rates it could just be what the UK public needs.
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There are 3 comments
Sweet blog Dave. I have to say the entire global economy is pretty stressful right now. My small community of Bellingham Washington, is a bit of a destination town and we typically fair well through recessions, but it is beginning to get really ugly out there. A lot of my friends are losing their jobs and really struggling to make their home, auto, and credit card payments.
Hopefully we are able to pull together on this one and break on through to the other side. (Sorry for the bad pun) Keep it real Dave!
Yes, I can attest to the bad situation, there are at least 2-3 major companies in my place reducing their operations and people lose their jobs. But it’s strange this time around, there is no panic or anything. People know recession is already here, those in jobs are calmly waiting for what will happen while those who are already out of jobs are coping, somehow.
Its getting worse day by day. Unemployment rate is going to soar in all countries.