Northern Rock: a Case Study
According to financial history books, the concept of lender of last resort dates back to 1797, when Francis Baring so described the Bank of England. A century later, the Bank of England (BoE) obliged by saving his institution from bankruptcy, but it did not repeat the gesture a second time in 1995, and the venerable Barings Bank went bankrupt; several economists applauded the decision not to intervene.
KeywordsCredit Risk Hedge Fund European Central Bank Money Market Credit Institution
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