Crazy Gordon – Between a Northern Rock and a Hard Place

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Scottish Prime Minister, non-elect, Gordon Brown

Scottish Prime Minister Gordon Brown has performed a Crazy Gordon, sluicing money into the ailing bank Northern Rock.

Northern Rock was under siege on Friday as desperate investors queued to withdraw their money and one couple were forced to barracade a Northern Rock manager in her office in an attempt to withdraw over GB£1 million that they had paid into their account with the bank.

On Friday the bank saw its share price fall like a stone from GB£12 to GB£4, the fall arrested by the closing of the market.

In scenes reminisient of the German Weimar Republik, that preceded the election of Adolf Hitler, the level of desparation on the faces of Northern Rock customers was plain for anyone passing the long queues.

Northern Rock claim that they are not insolvent and that may be technically accurate now that they have received a GB1.6 billion in emergency bailout loan from the Bank of England. The BoE emergency funding has two prime objectives. One is to prevent panic spreading through the banking industry. The second is to safeguard small investors. Without that loan, Northern Rock would have been forced to consider calling in the liquidators.

Nervous money markets are now watching closely and fearing other banks may be forced into the same situation.

BSD Newsdesk

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