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Northern Rock Borrowing
Reaches $32 Billion

Oct. 19, 2007 (EIRNS)—Northern Rock, the failed British mortgage lender, is believed to have borrowed another 3 billion pounds ($6 billion) from the Bank of England this week, bringing its total borrowings to 16 billion pounds ($32 billion). What is of concern is the fact that the borrowings are increasing. They were up from 2.3 billion pounds and 2.9 billion pounds in the previous two weeks, "indicating that Northern Rock's funding problems remain acute," economist Simon Ward told the London Guardian.

Northern Rock depositors are apparently continuing to withdraw their money, as reflected in a tremendous increase in new deposits at British building societies. (British building societies would be considered savings co-ops in the United States.) Deposits for September were a record 2.92 billion pounds, an astonishing one billion more then the previous record, as savers flee to the building societies from the banking system.