Northern Rock 30% Share Price Crash
Companies / Financial Crash Sep 14, 2007 - 11:33 AM GMTBy: Nadeem_Walayat
Northern Rocks Share price crashed by 30% today as the mortgage bank sought emergency funds from the Bank of England due to the credit freeze in the interbank money market which Northern Rock heavily relies upon. Panic gripped savers forming long lines outside Northern Rock Branches throughout the UK to withdraw funds. Investors dumping the stock on the market open where even unsubstantiated rumors of takeovers and white knights failed to halt the crash in the banks share price.
In our pre-market open article we warned about possible 'blood on the street' for Northern Rock stock holders as there was a high risk of a run on the bank as panicking depositors sought to withdraw savings. This is what has susbquently transpired. Northern Rock Bank Seeks Emergency Cash From The Bank of England
Chart Courtesy of Bigcharts.com
Northern Rock is Britain's fifth largest mortgage bank, and the Bank of England deemed it necessary for Britain's economic stability to come to its rescue by offering the mortgage bank an open ended line of credit for the duration of the current liquidity crisis, which is set to continue well into 2008. The amount of the funding has not been specified but is estimated at more than £4 billion ($8 billion).
Northern Rock also issued a profits warning, that its profits for this year will be £147 million lower than expected.
Related Articles on the credit crunch hitting the financial sector.
- 13 Sep 2007 - UK House Price Fall Signals Start of Housing Market Crash
- 12 Sep 2007 - Rise in Mortgage Interest Rates To Impact UK House Prices
- 09 Sep 2007 - UK Banks Short on Cash Entice Savers With High Interest Rates
- 06 Sep 2007 - UK Interest Rates on Hold at 5.75% As Financial Sector Crash Continues
- 05 Sep 2007 - FTSE 100 Index Forecast for Sept 2007 - Crash in the Financial Sector
- 22 Aug 2007 - UK Housing Market Crash of 2007 - 2008 and Steps to Protect Your Wealth
- 19 Aug 2007 - Credit Crunch Special
- 31 Jul 2007 - Hedge Fund Subprime Credit Crunch to Impact Interest Rates
- 01 May 2007 - UK Housing Market Heading for a Property Crash
- 20 Mar 2007 - The United States of Foreclosure - Subprime fiasco to trigger Stock Market Crash
- 22 Feb 2007 - US Housing Market Crash to result in the Second Great Depression
By Nadeem Walayat
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