Running dry

The UK has seen an old-style bank run like those of the nineteenth century. German lenders have struggled to prop up failing conduits. Contagion from the US has reached Europe but not in the way anyone expected. Subprime lenders, in particular, have been quick to increase their rates and tighten lending criteria. By Dippy Singh

Victoria Mortgages, just a few months ago, was enjoying a subprime mortgage boom in the UK. But this September the company went into administration, a turn of fortunes that few European lenders were expecting.

Victoria's fate was determined by the capital markets. The current US mortgage crisis sent the global capital markets into a spin this summer, resulting in investors effectively shutting