Aftershocks from the mortgage and credit crises are rattling nerves around the world — particularly in England’s banking and lending sector.
The Telegraph reports that investors have pulled more than 2.77 billion pounds (approximately $5 billion) from the British lender Bradford & Bingly, following the revelation of a cash crunch resulting from declines in its mortgage business.
Faced with a shortfall from low-rate mortgages, the bank had apparently been hoping — in vain — for an upturn in mortgage lending at higher prices.
Other banks may face a similar threat, one analyst said, describing the situation as a “mortgage market contagion” that could spread throughout the system.
“U.K. bank shares fall as investors bail out”
The Telegraph (U.K), June 3, 2008