The financial crisis, devouring the British economy, had fallen to a new low as £51 billion vanished of the value of the country’s top companies; this effected many banks around the UK.
Britain’s most popular mortgage lender ( Halifax Bank of Scotland ) lost 13% of it’s value. Many fears grew that it’s profits would be gravely affected by the global crunch. Both Barclays and Royal bank of Scotland had 9% wiped off their share. The FTSE 100 index dropped severely almost 4% to a two year low. In an attempt to restore confidence into the banking system, the Bank of England gave £5 billion into the money markets. Even though, the Bank of England took strenuous efforts to avoid this it was not enough to prevent the alarm spreading through the economy with predictions the worst was still yet to come. Soon later, fears began to increase as rumours spread that another major investment could be in serious danger of defaulting following the near collapse of Bear Steams.
In conclusion, the majority of British banks began to decrease in value leaving the economy alarmed.