Saturday, 1 March 2008
Light at the end of the tunnel
(Click on the image for a larger version)
So what is the tally so far? How much money has the Bank of England pumped into Northern Wreck?
The liquidity support for the Wreck was recorded under "other assets" in the Bank of England's banking department. In recent weeks, this support appears to have stabilized at around ₤32 billion. With the bank now nationalized, the cash injection has probably peaked. However, the Wreck has sucked up a lot of cash; liquidity support so far has amounted to something like 2.4 percent of GDP.
Now that Northern Wreck has stabilized, the Bank of England should be ready for the next big banking failure.