The Failure Of Northern Rock In The Light Of Banking Economics And Regulation
The Failure of Northern Rock in the Light of Banking Economics and Regulation
Introduction
Increasing global connectivity and integration in today’s world ensures that almost any serious problem has worldwide ramifications. The global financial system can serve as a key example of this phenomenon. Very recently, Britain’s fifth-largest mortgage lender Northern Rock was rescued by emergency funding from the Bank of England. This made the Newcastle-based firm the highest profile UK victim of the global credit crunch that had been triggered by the sub-prime mortgage crisis in the US. The bank run on Northern Rock that followed was unprecedented in recent UK monetary history. The Overend Guerney crash of 1866 was the last recorded bank run in the UK, before Northern Rock lost over £2 billion, starting on the 14th of September 2007.
Background
The run on Northern Rock can be considered as the most vivid indication of the contagion that consumed the financial markets......
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Approximate Word Count: 2233
Approximate Pages: 9 (250 words per double-spaced page)
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