The Daily Telegraph reported that Northern Rock is poised to draw on the Bank of England’s credit lifeline after bundling up £5bn of mortgages as collateral. The Times. The Daily Telegraph. Financial Times. The Independent
The news came as it emerged that Lloyds TSB has been working with UBS on a possible offer for all or some of the beleaguered lender.
Nevertheless, the government’s unprecedented move to guarantee Northern Rock deposits appeared to be have succeeded in stemming the run on the bank yesterday and restoring calm to the financial markets.
Queues disappeared from most branches of Northern Rock and the bank’s shares rose 8% higher on hopes that the government guarantee would pave the way for a buy-out bid.