By Wellington on January 14, 2009
The turbulence in the world financial markets during 2008 is blamed on a failure in the banking system. While it is certainly true that many leading banks acted imprudently and incompetently, the crisis was made worse and will be perpetuated by the high levels of both government and consumer debt in the US and EU. [...]
Posted in Develop Your Skill
By Wellington on August 12, 2008
Mervyn King, Governor of the Bank of England, is normally noted for his restrained and diplomatic language in statements concerning interest rates and the general performance of the UK economy. However, this reserve and restraint appears to be changing. During the Northern Rock banking crisis in the summer of 2007, he justified his reluctance to [...]
Posted in Develop Your Skill
By Wellington on July 16, 2008
The problems besetting Bradford and Bingley started on 14 April 2008 when it denied reports that it intended to raise funds through a rights issue of new shares and sought to reassure depositors, shareholders and the market that it had a strong capital and liquidity base. On 22 April, Mr Stephen Crawshaw, the Chief Executive, [...]
Posted in Develop Your Skill
By Wellington on July 4, 2008
The sight of worried depositors waiting in line outside branches of the Northern Rock Bank in England during September 2007 is a spectre which Gordon Brown wishes to banish from the UK high street. The Northern Rock disaster, and the television images of agitated depositors, was beamed round the world. The long term damage to [...]
Posted in Develop Your Skill
By Wellington on March 27, 2008
When the Federal Reserve Bank facilitated the takeover of Bear Stearns by JP Morgan, they provided an object lesson in central bank responsibility which the Bank of England should study and digest. The Fed’s intervention is startling due to the fact that Bear Stearns is not a bank. It is a financial intermediary, that is, [...]
Posted in Develop Your Skill
By Wellington on March 13, 2008
Northern Rock has been a cloud over the UK financial sector since it ran out of cash in August 2007. This was due to the fact that most of its funds were being raised in the wholesale market, that is from other financial institutions rather than deposits from retail customers. The problems of the US [...]
Posted in Develop Your Skill
By Wellington on March 7, 2008
Northern Rock plc was nationalised by the UK government and the shares suspended on 18 February 2008. There are several groups of interested parties in Northern Rock. They are the shareholders, depositors and mortgage holders. Shareholders Nationalisation is devastating news for shareholders. There were several options for a rescue plan, and the City considered the [...]
Posted in Develop Your Skill
By Wellington on March 2, 2008
The future of Northern Rock, the beleaguered UK bank still remains uncertain after the deadline of 4 February 2008 for bids from interested parties. The UK government is seeking to convert the estimated GBP25 billion of loans into bonds which will be sold in the open market. In order to make these bonds attractive, the [...]
Posted in Develop Your Skill
By Wellington on March 1, 2008
North Cyprus is not recognised as a separate, independent state by any country, other than Turkey. The Greek Republic of Cyprus joined the EU in 2004, but the Greek Cypriots voted against the UN plan to unite the island. In consequence, there is no extradition arrangement in place between North Cyprus and the UK. This [...]
Posted in Develop Your Skill
