Its Credit and its Crunchy

A funny video from the UK regarding the Northern Rock Bank run and the mortgage securitization business.

http://www.youtube.com/watch?v=br8mOmH9frE


And another British video on subprime loans

http://www.youtube.com/watch?v=Z5VeNwG3xms&NR=1

Bank of England Tries to Stop Bank Run

Bank of England tries to stop a run on mortgage bank
By Tariq Panja, Associated Press Writer

LONDON — The Bank of England provided emergency funding to mortgage lender Northern Rock on Friday after the bank, citing the global credit squeeze triggered by the U.S. subprime mortgage crisis, said it was unable to line up short-term loans from other financial institutions.
Even after the central bank issued a statement saying Northern Rock was solvent, slow-moving lines of customers snaked through the doors at the bank's branches to make withdrawals.

http://www.usatoday.com/money/world/2007-09-14-british-bank_N.htm

Northern Rock Gets Emergency Bank of England Funding (Update8)
By Ben Livesey and Jon Menon

Sept. 14 (Bloomberg) -- Northern Rock Plc got emergency funding from the Bank of England, the biggest bailout of a British lender in 30 years, after rising credit costs left the mortgage provider unable to make new loans.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a7WvTBECy164&refer=home

Northern Rock Crumbles
Vidya Ram, 09.14.07, 9:40 AM ET

LONDON -
The moment that the British banking sector has been dreading came on Friday. Northern Rock, the country's fifth-largest mortgage lender, confirmed late on Thursday that it had requested and received a line of emergency funding from the Bank of England.

http://www.forbes.com/markets/2007/09/14/northern-rock-britain-markets-equity-cx_vr_0914markets03.html

US lending standards "unbelievable".

From the UK:

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/20/bcnswiss20.xml

Top Swiss banker attacks US lending standards as 'unbelievable' By Ambrose Evans-Pritchard and Yvette Essen
Last Updated: 8:29am BST 20/08/2007

Switzerland's top banker has warned of massive losses from the unfolding credit crisis, describing the collapse in US lending standards as "unbelievable".

Jean-Pierre Roth, president of the Swiss National Bank, said market turmoil was far from over as tremors from the sub-prime debacle continued to rock the world.

"We're certainly not at the end of the story. There are question marks surrounding the development of the American economy," he said. "Something unbelievable happened. People who had neither income nor capital got credit with very attractive conditions. Now reality is striking back," he said.