Bank Runs

One of the historical examples of a bank run would be the Union-Rock plc. blue Rock plc is a British Bank which is demesne at Regent Center near Newcastle upon Tyne in northerly England. Northern Rock joined the stock exchange as a minor bank and it was expected to be understand over by one of its larger rivals but has remained independent. On September 13 2007, Northern Rock had a high-risk credit run and asked the Bank of England for liquidity support as they faced problems raising funds in the money food market to replace maturing money market borrowings. The problems occurred due to the change eyeshade crisis in the United States, which was a sudden improvement in home foreclosures which started in USA in belated 2006 and became a global financial crisis in 2007 and 2008. The banks assets were always fit to turn to its Liabilities but it had liquidity problems as institutional lenders were noi nearly roughly lending to mortgage banks following the US sub-prime crisis.

On 14 September, the first day when the news was spread near more customers withdrew their savings. It was estimated that £1 cardinal was withdrawn by customers that day, intimately 5% of the total bank deposits held by the Northern Rock. On 17 September., as worried savers continued to go to some Northern Rock bank branches to withdraw their savings, it was reported that an estimated £2 billion had been withdrawn since the bank applied to the Bank of England for arrest funds. By early afternoon in London, Northern Rocks shares, which had unconnected 32% on the previous Friday, fell a and 40% from 438 pence to 263 pence.If you want to get a full essay, ! golf club it on our website: OrderCustomPaper.com

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