Is Northern Rock the first of many?

Is Northern Rock the first of many?


    Or will it remain an isolated example?

Today’s main story comes not from politics but from economics, where it has been announced that the Northern Rock building society has received emergency financial assistance from the Bank of England.

In a very rare move, the Bank will become the “lender of last resort” to Northern Rock, after consulting the Treasury and the Financial Services Authority. The money lent will be substantially above base rate, and Treasury Select Committee chairman John McFall commented that management at the firm were not without blame.

The markets, and the banking sector in particular, will be bracing themselves today, and indeed Northern Rock shares have already plunged 21% in early trading. Will Northern Rock be the first domino to fall, with others to follow and a very severe financial crisis looming, or an isolated case that can be contained?

In other news, President Bush has announced details of a partial troop withdrawal from Iraq, and the leadership race in Japan has been gathering pace.

“Forthcoming attractions”

  • Sean Fear’s Friday slot should be out later today
  • Alexander Drake’s look at the battleground in Australia will be featured tomorrow
  • Paul Maggs “Double Carpet”

    Guest Editor

    Mike Smithson returns on 17th September

    Paul Maggs runs The Election Game – click on the logo to email for more information.


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