Essay代写：A run on northumbria bank in Britain－r51due

下面为大家整理一篇优秀的essay代写范文- A run on northumbria bank in Britain，供大家参考学习，这篇论文讨论了英国诺森罗克银行的挤兑事件。受美国次级债危机导致的全球信贷紧缩影响，英国诺森罗克银行发生储户挤兑事件。自全国范围的挤兑发生以来，仅仅几天的时间就有30多亿英镑从诺森罗克银行流出，占该行240多亿英镑存款总量的12%左右，其电话银行和网上银行业务一度出现崩溃。为防止系统性银行危机的出现，英国财政部、英格兰银行与金融管理局先后采取了注资以及存款账户担保等救助措施，至此，诺森罗克银行的储户挤兑情况才有所缓解，各大银行的股价也出现不同程度的上涨，银行体系的恐慌局面才得以控制。

Financial globalization is accompanied by the globalization of risks. As far as the subprime crisis in the United States has affected the northumroc bank in the United Kingdom, the shock of depositors' run and stock price crash has followed one after another. Whether the central bank and the Treasury Department can inject capital and guarantee to save the bank is still unknown, but the bank run that occurred in the golden age is worth thinking about.

Recently, due to the global credit crunch caused by the subprime crisis in the United States, the UK's fifth largest mortgage lender, northrop grumman bank, suffered a run on depositors. Since the nationwide run began on September 14, more than 3 billion pounds have flowed out of northrop grumman bank in just a few days, accounting for about 12 percent of the bank's 24 billion-plus pounds of deposits as of September 18. Its telephone and online banking businesses have collapsed. Northumroc's shares fell nearly 70 percent in recent days to a seven-year low, making it the biggest casualty of the credit crisis in Britain. To prevent the occurrence of systemic banking crises, the Treasury, the bank of England and the financial administration has taken a capital injection and rescue measures, such as guarantee deposit account to 18, runs from the northern rock bank depositors to ease, each big bank shares also appeared different degree rise, the panic of the banking system to control. This is a brief review of the bank run in Britain, and the reasons behind it are worth looking into.

Founded in 1850 as a home loan association, northrock became a bank and went public in 1997. The bank is now Britain's fifth-largest mortgage lender, with 1.5m depositors and 800,000 homebuyers to lend to. In the first half of this year, northrop grumman accounted for 18.9 per cent of all new mortgage lending in the country, ranking first in the UK. But why did Norfolk rock, once a champion of the mortgage market, fall into a run? In addition to the above adverse factors in the UK's economic and financial environment, this may be caused by the following factors:

Unlike other Banks, which get most of their money from depositors, Norfolk rock still gets most of its money from financial institutions, even though it became a publicly traded bank in 1997. Less than a quarter of northumroc's capital comes from retail deposits, while more than three-quarters comes from the wholesale market, where it is financed by borrowing from one another, issuing bonds or selling asset-backed securities. The 75% figure is far higher than that of other major mortgage companies in the UK. Table 2 shows the proportion of capital of several major mortgage institutions that rely on the wholesale market for financing. HBOS, the UK's largest mortgage lender, also had 43 per cent. Given the stability of retail deposit financing, northrop amro bank, which derives most of its capital from the wholesale market, is more susceptible to the impact of the supply and demand of funds in the market.

The difference in pricing between the wholesale market and the home loan market has widened the interest rate gap at northrop grumman. Both bond issues and securitisation of home loans are priced at three-month Libor rates on the market. However, northrop grumman's home mortgages are issued at the bank of England's benchmark interest rate. This pricing method of investment and financing will cause bank losses when the money market interest rate is significantly higher than the official interest rate. Of northrop grumman's assets, mortgages to consumers amounted to 96.7 billion pounds, or 85.2 percent. Of the more than 96 billion pounds in mortgages, it is estimated that 12 billion pounds are directly exposed to the risk of this interest-rate gap. This means that for every basis point Libor exceeds the benchmark rate, Norfolk rock will pay an extra 12m a year.

To make matters worse, since July, northrop grumman bank, which mainly relies on wholesale markets for financing, has struggled to secure stable financing channels due to the tight liquidity in global money markets caused by the subprime mortgage crisis in the United States. Market analysts said northrop grumman needed to raise 10 billion pounds and raise another 8 billion pounds over the next 12 months to meet growth targets set earlier this year. The problem is that investors have lost interest in mortgage assets because of the subprime crisis in the United States. Moreover, even if it is not affected by the us subprime debt crisis, the panic in the UK subprime bond market will gradually be exposed. Indeed, the liquidity panic among British investors was evident in the case of west bromwich alfa, whose recent securitisation products had to be cancelled because no one had bought them. As you can see, Britain's credit markets are starting to close. That would be a fatal blow to northern rock, which relies heavily on credit markets to finance itself.

The widening of the interest rate gap between the assets and liabilities and the slowdown of the loan business caused by the lack of liquidity have reduced the operating income of Banks, and the direct cause of the depositors' run may be the decline of the expected income of Norfolk rock bank. Although northrop's share of the mortgage market rose sharply in the first half of the year, to 18.9% from 14.5% in the second half of 2006, and its total assets rose 28% from a year earlier, its profits did not rise significantly. Northrop grumman's pre-tax profit in the first half of 2007 was less than 300m, little changed from a year earlier. Asset increases substantially, and profit does not increase, the fact that the operation income of the bank drops. On September 14th northrop grumman issued another profit warning, saying that interest rates had risen unexpectedly, that asset growth had slowed as a result of the credit crunch and that pre-tax profits for 2007 were expected to be about 20% lower than expected. The announcement of the news also directly triggered the day of widespread depositors run.

In fact, northrop amro does not invest much in the us subprime bond market, accounting for 0.24 per cent of its total assets. It has about 275 million pounds, of which 200 million pounds is invested in us collateralized debt obligations and 75 million pounds is invested in mortgage-backed securities. And these securities have a duration of less than two years and will not affect lending in 2006 or 2007. While the losses are small relative to the overall assets, they already account for 40% of northumroc's portfolio portfolio, and could have a bigger psychological impact on investors in the market.

Since the outbreak of the subprime mortgage crisis in the United States, the bank of England has adopted a completely different regulatory approach from that of the European central bank and the federal reserve -- to do nothing, that is, not inject capital into Banks or lower the discount window interest rate. Although Britain's subprime debt crisis may be worse than America's, the government and the bank of England did not seem to recognise the problem before the liquidity crisis hit the banking system. In mid-august, most central Banks around the world, including the federal reserve and the European central bank, injected $38 billion into Banks three times a day to ease the liquidity squeeze caused by the subprime crisis, while the UK did not inject capital into the banking system.

The bank of England governor mervyn gold has repeatedly said, not follow other central Banks for Banks, he thought, the UK should avoid giving investors "the central bank will pay for the market participants error decision" impression, capital injection may encourage "excessive risk-taking, saddled for future financial crisis". For the behavior of the capital, in addition to mervyn gold fear injections cause "moral hazard" in the financial markets this concern, another reason may be that the British authorities believe the criteria for the assessment of domestic housing mortgage loan and the subprime mortgage market is heavily regulated in the United States, and Britain is no housing oversupply problems such as the United States. In August, a spokesman for the UK's monetary authority noted that "overall, the relatively good recent economic conditions have kept the financial institutions we regulate relatively well capitalised". This optimistic view of the UK subprime market is Shared not only by the authorities but by many in the market. That is not the case, however, and the bank of England now appears overly optimistic and confident before the liquidity crisis in the banking system.

In addition, the bank of England's early non-injection of capital is also related to the "lender of last resort" system. Since 1998, since the revision of the bank of England issued and implemented, the function of the bank of England began to independently control the conduct of monetary policy, but the exercise of lender of last resort function became the behavior of the bank of England is very rare, because according to the regulation, the bank of England when exercising the functions of the lender of last resort to negotiate with the monetary authority in advance. Before the crisis, the bank of England was reluctant to inject capital, and the monetary authority deemed it unnecessary.

The bank of England announced on Friday that it would inject 4.4 billion pounds into financial markets as criticism of the "hands-off" approach grew in the face of growing strains in the interbank lending market. However, at this time, the injection of capital could not change the tension in the market. Three-month Libor continued to hit new highs, and the three-month Libor from September 7 to 13 was as high as 6.85%. On Thursday, northrop grumman ran out of liquidity and ran on some of its branches, forcing it to apply for emergency loans from the central bank. Only then did the British government begin to realize the seriousness of the problem. The Treasury, the bank of England and the financial administration in that northern rock bank to apply for an emergency meeting of the second day, three departments issued a joint statement pointed out that the northern rock bank is still the repayment ability, and its capital adequacy ratio meets the requirements, the loan quality is no problem, the current run is only a temporary liquidity difficulties, appears the bank as a result, the Treasury authorized the bank to the northern rock bank to provide the financial support of a punitive interest rates. However, after the announcement was made through the media, and Norfolk rock bank also announced the bad news that its expected earnings for the whole year would decline, the bank's stock price immediately fell by nearly a quarter, which was just a small run that broke out in some branches and quickly spread to the whole country. Over the next three days, depositors ran even harder, reducing northrop grumman's deposits by more than 3 billion pounds in just a few days. To make matters worse, two other British Banks, Alliance & Leicester and Bradford & Bingley, also saw their share prices tumble on the 17th, as speculation mounted that this would be the next "northrock".

The Treasury promised full compensation. 17 in the evening, to alleviate the northern rock bank runs, the outbreak of the prevent systemic financial risks, the Treasury secretary Darlene had to once again announced that the government will ensure the safety of the bank deposits existing government guarantee will cover all deposits, no matter how much the amount, and the government will also be the same as the northern rock face problems of other bank account. The Treasury's commitment to a full guarantee is unprecedented, even extreme, and goes beyond the provisions of the UK service compensation scheme. According to the financial compensation regulations of the United Kingdom, the British service compensation plan is only a simple "payment box" mechanism, so the compensation plan limited company has not been involved in the bank run crisis. Under the financial compensation ordinance, depositors with less than 2,000 pounds of deposits will be fully compensated if the bank fails, while those with more than 2,000 pounds will not be fully compensated. The Treasury's promise of full guarantees was a reassurance to depositors.

In addition to the full guarantee from the Treasury secretary, the bank of England has increased its capital injection into the banking system. On the 18th, the bank of England promised to inject 4.4 billion pounds of low-interest money into the banking system, and on the 19th it announced that it would inject 10 billion pounds of money into the three-month capital market next week, in an attempt to deal with the lack of liquidity in the overnight interbank market over a longer period.

With this series of heavy government intervention, the run on northrop grumman bank subsided and the financial panic in Britain was brought under control. Review the administration behavior, can be found in the banking system liquidity before the crisis, the bank has refused to capital to the banking system, nor reduce the discount rate, the financial administration is optimistic that unnecessary capital injection, these is the British to become the subprime crisis "disaster zone," a very important reason. Against the background of increasing financial panic, the British authorities changed their original intention of inaction and were finally forced to impose financial aid and deposit guarantee on Banks, so as to control the panic in the financial system. However, the capital injection and deposit guarantee are adopted to solve the problems of northrop grumman bank. On the one hand, the regulatory authorities always believe that northrop grumman bank is still solvent and the fundamentals are sound. On the other hand, regulators fear that northrop grumman's risks could spread throughout the financial system. However, the question of whether the UK government's aggressive support for northrop grumman involved a breach of market competition principles has raised concerns among eu officials, even though the current aid is considered emergency.

As the "protagonist" of the whole run, what measures did northrop amro bank take to cope with the run? This is also worth our attention. To sum up, northrop grumman bank mainly took the following measures:

In addition to applying for an emergency loan from the bank of England on September 13th to boost liquidity, northrop grumman has sought to raise liquidity through asset sales and restructuring. News has emerged that the troubled bank northumroc is planning to divest up its 100bn-worth of mortgage debt. In fact, as early as June and July, Norfolk rock bank sold more than 1 billion pounds of Commercial insurance loans to Lehman Commercial Mortgage Conduit Limited. Northrop grumman's chairman, on the other hand, has publicly called for a takeover. There have also been rumours that lloyds, a British bank, and a number of foreign Banks are interested in buying northrop grumman.

In the face of panic in the markets, solvent northrop grumman soothed depositors by stepping up its statements that it was operating normally and would try to keep customers' money safe. After Sept. 16, northrop grumman posted an open letter from its chairman on its home page that said the company would keep its customers' money safe. And for days northrop grumman ran full-page ads in Britain's main newspapers declaring that its business was normal. These have played a certain role in easing the tension of customers.

想要了解更多英国留学资讯或者需要英国代写，请关注51Due英国论文代写平台，51Due是一家专业的论文代写机构，专业辅导海外留学生的英文论文写作，主要业务有essay代写、paper代写、assignment代写。在这里，51Due致力于为留学生朋友提供高效优质的留学教育辅导服务，为广大留学生提升写作水平，帮助他们达成学业目标。如果您有essay代写需求，可以咨询我们的客服QQ：800020041。