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Northern Rock asks for emergency funds
14 September 2007
One of the UK`s biggest mortgage lenders has asked the Bank of England (BoE) for emergency funds to help it through the current instability in the financial markets.
Northern Rock has struggled to raise money to finance its lending ever since money markets seized up over the summer and now has asked the BoE to help it out.
However, Northern Rock has assets worth £113 billion and any fears of bankruptcy have been played down by the company`s management. In a statement released to announce the decision, Northern Rock predicted it would make profits of around £500 million in this financial year, down from £588 million in 2006.
The company`s statement said: "On the assumption that the current conditions remain until the end of 2007, there will clearly be an impact on Northern Rock`s 2007 asset growth and therefore on profits."
In related news, the European Central Bank said risks to the global economic outlook have increased as a result of the recent turmoil in financial markets.
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