International Finance and Banking

International Finance and Banking Essay example
Masters
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Finance & Accounting
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International Finance and Banking Contents Introduction 3 Concise summary of the facts of the case 3 Response of the financial markets 6 Role of regulators and Government Institutions 7 The lessons learnt from the case 9 Data Analysis 10 Conclusion 18 Reference 19 Introduction Northern Rock plc is a bank of Britain…

Introduction

In 1965 the Northern Rock Building Society was formed as a consequence of union between the two North East building societies. The bank was nationalized in 2008. Concise summary of the facts of the case In the year 2007, the country of United Kingdom experienced the bank run for the first time in over 140 years. At that time the bank under consideration was not significantly large as it was ranked 7th taking the total assets in consideration. But the bank played a significant role in retail banking business. The bank also had its mark as a mortgage lender. About a decade ago, the bank transformed itself from a mutual building society to retail deposits as well as mortgages. The depositors queued outside the bank to withdraw the deposits. It was feared that it could shed its impact on the deposits of the bank. After repeated attempted failures to secure a purchaser operating in the private sector, the government took the initiative to nationalize the bank. The bank now operates as a bank that is fully owned by the state. Since then, the government has acquired substantial stakes of equity in other banks of Britain as a part of the general program of re-capitalization (Llewellyn, n.d. p. 1). ...
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