Northern Rock chaos shows fundamental shift

How far the subprime story has ceased to be about subprime became clearer in September, when the UK's fifth biggest lender, Northern Rock, became its most recent victim.

As a prime lender, Northern Rock has limited holdings of US securities and refers subprime cases in its home market to Lehman Brothers, meaning that riskier lending does not remain on its balance sheet. Yet, the lender's reliance on the capital markets for funding has proven a decisive weakness, with those markets currently effec

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