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Commentary: the Banking Crisis and the Economy

Published online by Cambridge University Press:  26 March 2020

Martin Weale
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Extract

The past few weeks have seen an intensification of the banking crisis in the United States, with the near failure of Bear Sterns, although some commentators hopefully say that the worst has now passed. In the United Kingdom the gap between the Bank Rate and money market rates has re-opened and is described as indicative of a reluctance of banks to lend to each other. In this commentary we seek to explain the fundamental factors behind recent developments in UK lending markets. We begin by describing the recent experience of the financial services industry in the United Kingdom and putting the crisis, which has been described as the worst since the Second World War, into some sort of perspective.

Type
Article Commentary
Information
National Institute Economic Review , Volume 204 , April 2008 , pp. 4 - 8
Copyright
Copyright © 2008 National Institute of Economic and Social Research

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