Therre has been muttering in the City for many months about an impending mortgage crisis.It looks as though it is upon us or very near. Why is it that having such a long period of notice the "Big Boys" did nothing about it? A small buiness making profits and having liquidity problems would be acccused of financial incompetence or worse
2007-09-13 20:40:08 · 4 answers · asked by Scouse 7 in Business & Finance ➔ Corporations
Liquidity support to me means that they are have a shortaage of immediate cash and can not get hold of it except through the lender of last resort. If I have not read the news properly I have unders6tood the implications> Norhern Rock are not going bust I agree but they are in great difficulty. Not spreadin g alatm just seeing the truth. Threre will be others
2007-09-13 21:18:11 · update #1
its to do with northern rock having a low deposit base, ie they dont have alot of customers who regulary deposit money like any normal high street bank. They are mainly a mortgage provider and investment bank.
they make most of their funding to provide mortgages etc.. from the money markets whihc have suffered fomr the slump in the US and therefore are cash short.
they have enough capital and a good lending base but they are suffering short term only and are still solvent.
2007-09-13 21:16:33 · answer #1 · answered by Paul S 5 · 0⤊ 0⤋
According to TV it isn't a liquidity problem.
All banks/b.soc borrow off each other regularly, and due to US stock market problems, it is more expensive for Northern rock to borrow from other banks (due to interest rate rises), than it is to borrow from the bank of England
2007-09-13 20:44:51 · answer #2 · answered by spiegy2000 6 · 1⤊ 0⤋
i can not answer that question yet i think of it fairly is bloody disgusting tje way the financial business enterprise of britain bails them out with billions of our complicated earned funds whilst they gained't help the individuals who've misplaced thousands of pounds because of the fact of farepak hampers and in all possibility had this christmas ruined ans spoilt because of the fact they an no longer replace what they have misplaced
2016-12-26 10:04:12 · answer #3 · answered by Anonymous · 0⤊ 0⤋
i don't think you've read the news item properly. northern rock are not having a "liquidity problem". they are simply having problems drawing funds from the larger banks. i think you are scare-mongering
2007-09-13 20:50:10 · answer #4 · answered by benny_chops 3 · 0⤊ 0⤋