Will Grigg's Liberty Minute

February 20, 2008

England?s Northern Rock bank may be the first pebble in a global banking avalanche.

Newcastle-based Northern Rock is England?s fifth-largest mortgage lender. Last September, amid the global credit crunch provoked by the meltdown of the US mortgage market, Northern Rock applied to the Bank of England for emergency aid. This request was intended to prevent a bank run. Instead, it precipitated one.

In the course of a single weekend, the bank lost some $4 billion to withdrawals before the government guaranteed the bank?s deposits, and police were sent to disperse panicky customers. As the Economist magazine notes, this was England?s first bank run since 1866.

On February 17, the British government announced that it was nationalizing Northern Rock. Robin Ashby, one of the bank?s shareholders, lamented: ?This is a very bad day for Britain.?

It may also foreshadow grim things to come for banks on this side of the Atlantic as the credit crisis unfolds.

Let us take back the liberty wherewith Christ has made us free.