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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.
3 comments:
i wonder if this includes guarantees the government/bank of england has written on northern rocks assets, or just cash it's actually had to put up?
Trader boy,
It is just the cash injection, which must be shown on the balance sheet of the bank of england. It does not include the guarantees.
Alice
cheers, thought as much.
the whole bailout p*sses me off, but I'm still gonna open up an account at Northern Rock. safest bank in the UK now it's government owned.
also, does anyone know for sure if the government deposit protection on bank accounts is now legally 100% of £35k, as opposed to formerly 90% of ~£31k? i've read somewhere it is but haven't been able to get confirmation. i'm concerned for my savings as i can imagine a systemic banking failure...
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