March 18, 2008

Banks looking to borrow £23 billion

The UK banks are looking to borrow anything up to £23 billion from the Bank of England in emergency loans, which just show the extent of the financial pressures being forced upon them by the crisis in the states.

The trouble that the banks are having at the moment is that it costs too much to borrow from with the banking industry that is if they can borrow from them in the first place. This follows the Northern Rock and more recently Bear Stearns who have both suffered dramatic falls from grace.

Around £14 million wiped of the banking sector shares yesterday taking them down to a two and half year low. This has the making of a serious banking crisis which could see even more changes to the industry. Already they are changing the way that they lend money, in fact there may come a time when the banks revert back to old days of banking, where you could only borrow money if you had money for a significant deposit.

Source [Times]