Northern Rock approached the Bank of England at the end of last week to discuss using the facility, people familiar with the situation said. The lender made its decision because it faced pressure to refinance obligations that are due to mature in the next couple of weeks.
Northern Rock executives were expected to say on Friday that the bank would try to work through its difficulties with the help of the Bank of England facility. However, the move is likely to make it hard for Northern Rock to remain independent in the long term. The bail-out is a devastating blow for the bank, which grew from its roots as a building society in the north-east of England to become the most efficient mortgage lender in the United Kingdom. Northern Rock declined to comment.
The rescue came as the Federal Reserve released data showing that direct loans to banks, through its discount window, had reached their highest level since the September 11 attacks.
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