Northern Rock - the ripple effect continues

Today's Financial Times (Friday 14th Sept) highlights the most serious impact so far of the financial turbulence in UK terms. Northern Rock has announced that it has had to go to the Bank of England to ensure proper levels of liquidity going forward. As a company with 20% share of the UK residential mortgage market, this has potentially important consequences as it brings the impact of the financial turbulence into ordinary UK households (with mortgages or with deposits with Northern Rock) and so has much greater political ramifications. It brings greater political pressure on the Governor of the Bank of England to take a more active process than he has wanted to. See how this story develops over the next week. Take a look at the FT.com web site as they have an actual copy of the statement put out by Northern Rock. Consider the style of the communication and also the number of people assigned to handle this important communication. The market may take the view that this is the end of Northern Rock as a standalone company and it will be acquired over the next six months.