Abstract
One of UK's largest mortgage lenders is The Northern Rock. Northern Rock has become the highest profile (UK based) victim of the fallout from the global credit crunch. The reference to the credit crunch is the one which stemmed from the sub-prime mortgage crisis in the US. The Bank of England pitched in to grant emergency financial assistance to Northern Rock. This support from the bank of England was mainly to prevent Northern Rock from reaching a devastated state. Northern Rock is one of the top five mortgage lenders in the UK in terms of gross lending. In addition to mortgages, the bank also deals with savings accounts, current accounts, loans and insurance policies. Providing secured loans to its existing mortgage customers is also one of the prime services provided by Northern Rock. In September 2007, Northern Rock asked the Bank of England, to serve and act as the ?lender of last resort' in the United Kingdom. This strategy was adopted to increase the liquidity position in the bank. The bank's (Northern Rock) assets were always sufficient to cover its liabilities. However, it suffered from a liquidity crunch because institutional lenders became nervous about lending to mortgage banks following the US sub-prime crisis.
