The EU agreed to give Northern Rock another 8bn today to help it sure up it’s position and offer more mortgage packages to the British public. Based on the fact that banks have done little with the bail-out money to help customers and haven’t passed on the entire drop in the interest rates, who knows what will actually happen with another £8bn.
The money has got a purpose and will go toward creating 2 new companies and boosting the UK housing market to bring back fast house sale deals and increased mortgage lending. This was outlined in this statement on Northern Rock’s website:
Northern Rock Plc “…will also offer new mortgage lending to support the Government’s objective of increasing mortgage supply and sustaining a competitive market”.
The second company will be called ‘Northern Rock (Asset Management) plc’ which claims: “90% of the mortgages held by Northern Rock (Asset Management) will be fully performing and are not in arrears, and this company would not, therefore, be accurately described as a ‘bad’ bank”.
Well let you decide that one.