Market mulls implications of Northern Rock rescue plan

The UK government's rescue plan for Northern Rock was met with mixed reactions last month.

Under the plan, drawn up by Goldman Sachs, the Bank of England's emergency loan to Northern Rock (currently around £24 billion) will be refinanced into bonds and sold to the capital markets - backed by the lender's mortgages, unsecured consumer loans and certain investment grade securities.

This unprecedented securitisation will carry a guarantee from the UK government, which will have a first priority inter

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