September 13, 2007: News of Northern Rock’s Financial Difficulties Breaks

News of the financial difficulties of troubled British mortgage giant Northern Rock breaks in the British media. [Daily Telegraph, 2/26/2008; BBC, 8/5/2008] The BBC reports that Northern Rock’s situation is so bad that it has asked for and been granted emergency financial support from the Bank of England, in the latter’s role as lender of last resort. BBC business editor Robert Peston says Northern Rock is not in danger of going bust and there is no reason for its customers to panic. However, he adds that “the fact it has had to go cap in hand to the Bank is the most tangible sign that the crisis in financial markets is spilling over into businesses that touch most of our lives.” [BBC, 9/13/2007]