Northern Rock the UK's fifth-largest mortgage lender, has asked The Bank of England to provide emergency financial support. This has made the Newcastle-based firm the highest-profile UK victim of the global credit crunch, triggered by the sub-prime mortgage crisis in the US. But the question is how many more to come? Following the widespread losses made by investors in loans to US homebuyers with poor credit history, the so-called sub-prime loans, banks and investors who have had their fingers burned have become wary of buying any mortgage debt.
As financial times stated: “When the patient is in seizure and the extremities are starting to turn blue it is not the time to worry about the patient’s longer-term dietary plans or about undesirable side-effects of the current treatment. Yet I fear this is what central banks will do. The next set of steps had better be convincing and decisive, otherwise a much wider financial implosion and economic recession will become very likely.”
How will it affect the jobs in the city? Will we see a slowdown? Lets wait and watch