Northern Rock

About Northern Rock

Northern Rock was nationalized by the UK government in February 2008 after the first bank run in Britain since 1866. Northern Rock was the fifth largest mortgage lender in the UK. The bank relied heavily on wholesale funding rather than deposits. When credit markets froze in August 2007, Northern Rock could not refinance its borrowing. Depositors queued outside branches to withdraw savings. The images of bank runs shocked the nation. The Bank of England provided emergency liquidity support. Northern Rock was eventually split into a good bank and a bad bank. The good bank was sold to Virgin Money in 2012 for 747 million. The bad bank wound down over several years. UK taxpayers ultimately lost approximately 2 billion on the nationalization.