Could Bradford & Bingley be the next Northern Rock? Their shares have fallen to an all-time low. Apparently the government and financial regulators are monitoring their performance and Alistair Darling is being regularly updated on the situation by the Financial Services Authority. This sounds like action will be taken if needed.
Market intervention is flavour of the month at the moment and the Bank of England is about to inject £40 billion into the money markets. With banks reluctant to lend to each other, the Bank of England feels the need to prop up the liquidity in the market. But then a couple of weeks ago they offered £25 billion and nobody wanted it. The fact is that the market does what it needs to do to reach equilibrium and no amount of intervention will succeed. And I really don’t intend that as a gloomy prediction – I’m just saying that whatever the market decides (if that’s not too teleological a statement) is what will happen.