Mumbai:
Ailing British bank Northern Rock has drawn down 2.9 billion pounds ($5.8 billion)
from the Bank of England''s emergency financing facility to stay liquid. Total
assets of the bank rose 11.3 billion pounds, 8.4 billion, which "represented
stepped-up operations to supply market liquidity," weekly accounts released
by the company showed. The
remaining 2.9 billion pounds occurred in the other assets category and may represent
the bank''s ''lender of last resort'' support to Northern Rock, according to analysts.
Northern Rock
has refused to comment. The
Bank of England stepped in to help Northern Rock on last week, after the mortgage
lender was hit by the credit squeeze that dried up the money markets worldwide. The
bank also saw the biggest run on its deposits following news of the central bank''s
intervention, with around 2.5 billion to 3 billion pounds withdrawn from retail
deposits at Northern Rock. Bank
of England announced had approved an undisclosed sum in emergency funding to help
the bank overcome a liquidity crisis, and Northern Rock chief executive Adam Applegarth
has said the company expected to borrow substantial amounts of money, without
specifying. A
Bank of England spokeswoman confirmed that its weekly balance sheet had expanded,
but said the figure was speculative.
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