Could more UK banks fall?
After the double whammy of the demise of the US led bailout and the failure of the Bradford and Bingley there are some very nervous banking execs in the UK and around the world. While the Bradford and Bingley was by no means one of the leading UK banks, nobody would have even joked about a collapse prior to the credit crunch. However, here we have it, HBOS saved by a rescue bid from Lloyds Bank and Northern Rock and Bradford and Bingley being taken under government ownership.
While it would be foolish to scaremonger in such conditions there is every chance that another UK or major European bank could go under before the situation improves. The US move had been as much about strengthening balance sheets as it was about increasing confidence and now that has gone (at least for the time being) the money markets are sure to freeze over again.
This could easily put more UK banks under pressure and while the FSA is currently happy with the funding position of the UK banks it has the situation under close scrutiny. While the Bank of England was seen to act fast to save Bradford and Bingley it may need to be a whole lot quicker if one of the majors comes under renewed pressure.
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