Scottish Business Briefing – Thursday Sept 27 2007

A one-off ВЈ10 billion loan facility offered by the Bank of England has been cold-shouldered by the UK’s major banks as they fear the вЂNorthern Rock effect’. It has also been suggested the rate of interest at which the facility was being offered, 6.75%, was putting many banks off. The current interbank lending rate is nearly half a point below that being offered by the Bank of England.

Chief UK economist at Deutsche Bank, George Buckley commented: “We thought that the liquidity in the markets would encourage some financial institutions to take this money, even at penal rates (of interest).

Full text