1. British banking regulation and supervision: between a rock and a hard place.
- Author
-
Mullineux, Andy
- Subjects
LOANS ,BANKING industry ,MORTGAGE loans ,BRITISH people ,RATES ,LIQUIDITY (Economics) ,HOME (The concept) - Abstract
The article focuses on the regulation and supervision on different British banks. Northern Rock (NR) is a "mortgage bank," which specializes mainly in making home loans. Using an "originate and distribute" model, NR grew aggressively after its de-mutualization from a local base in the North-East of England. It made use of the chance to "securitize" a lot of individual home loans, using the receivables on those loans to back the assets it issued. This allowed NR to raise new fund periodically to make further loans. The European Central Bank (ECB) and the US Central Bank acted properly to insert liquidity into the markets to bring down market rates closer to their traget rates.
- Published
- 2007
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