Bank of England Has to Desperately Come to the Rescue as Crisis Deepens
According to the BOE's website, on July 17, one or several institutions borrowed 109 million pounds ($217 million) through this facility, and on July 2, a considerable 1.93 billion pounds ($3.84 billion) were lent through this facility.
The Aug. 21 Bloomberg.com compiled a list of institutions which told that news service that they had not borrowed through the BOE standing facility; however, given the advancing breakdown of the financial system, intersecting the huge volumes of leverage and derivatives centered in the City of London, it is likely one or several of the financial institution did not tell Bloomberg the truth. Solent Capital Partners LLP, a U.K. hedge fund manager, said Aug. 20, it may be forced to sell assets in a unit after lenders refused to provide short-term funding. HBOS Plc, the U.K.'s largest mortgage lender, was forced to step in to repay a huge $35 billion of commercial paper owed by its Grampian Funding LLC unit, as contagion from the financial crisis, drove up the cost of borrowing.
Meanwhile, two UK insurance companies-- Brit Insurance, and British Insurance-- suffered falls in their stock prices Aug. 21 after it was reported that an insurance company in Britain was selling pounds in the money market, ostensibly to cover dollar losses. The rumors were that a British insurance company was in trouble, and it is possible that this may have gotten transposed into the names British Insurance or Brit Insurance, although deep problems in either of these companies cannot be ruled out.
Earlier this year, London- centered HSBC, one of the world's largest banks, experienced heavy losses in the U.S. mortgage market.