Britian Bank Crisis Coming?
Sep 17th, 2007 by Shaun Carter
Northern Rock PLC is Britain’s 5th largest mortgage lender and is suffering from a run on its bank branches by thousands of Britons as they rush to withdraw their money citing insolvency concerns. On Friday, the Bank of England made an emergency loan to Northern Rock to help them satisfy the billion in cash withdrawals its customers were requesting.
Alan Greenspan is one influential economist who has been predicting a housing slowdown in Britain similar to the one being experienced in the US and this theory is hitting the spotlight today as his book, “The Age of Turbulence” is being released. Many Britons have adjustable rate mortgages that could rise significantly in costs and mimic the mortgage meltdown here.
Meanwhile, trading has been suspended in the shares of Northern Rock as it plummeted 30% today after a previous 30% drop last Friday. Shares in the bank are now trading near $6/share and are considered ripe for a buyout offer from a strong, reputable bank that could swoop in and salvage the reputation of the bank and instill confidence in the system.
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