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Bank of England Lending to Northern Rock Tops $40 Billion

Oct. 26, 2007 (EIRNS)—It has been revealed that the Bank of England's (BoE) lending to failed London bank Northern Rock, has now topped 20 billion pounds ($40 billion), sparking demands that Northern Rock's entire board of directors resign.

The lending continues to accelerate. Last week it borrowed 3 billion pounds, and this week 4.7 billion. And according to Simon Ward, an economist cited by the Guardian, withdrawals of deposits from Northern Rock have probably exceeded the 5.5 billion pounds the bank has admitted to. Furthermore, Northern Rock needs to refinance up to 10 billion pounds of commercial paper and certificates of deposit, which no one accept the BOE is willing to do.

Meanwhile, JC Flowers made a formal announcement that it is seeking to take over Northern Rock.

Rumors are out that another leading British bank took emergency credit as well, but no one is mentioning a name.