According to the Bank of England weekly accounts, a further £2.9 billion was taken out, listed in the accounts as ‘other assets.’ Despite the accounts failing to identify the lender, it is thought that Northern Rock was forced to obtain further funding, as the BoE would have to disclose any new borrower.
However, the BoE, and the ailing lender refused to comment on the industry speculation, while David Kenmir, managing director of regulatory services at the FSA, reiterated that the UK market was safe, despite recent market turbulence. He said: “The UK banking industry has entered a period of market turbulence after several years of very strong market conditions which have helped it build up healthy balance sheets and strong capital positions. Therefore banks are generally starting from a good position to withstand the global pressures from what is an issue of liquidity distribution.”
In other developments with the ailing lender, it has been suggested that Merrill Lynch, in alliance with US organisation Citigroup would offer the lender a £10 billion loans package, with the money lent at a lower rate than the Bank of England’s.
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