The subprime crisis claimed its latest victim overseas Friday when the Bank of England bailed out mortgage lender Northern Rock.
The British central bank rescued the mortgage lender by providing emergency funds after Northern Rock was unable to finance its operations in the money markets. Northern Rock shares fell more than 20% in London, and European stock markets posted broad declines.
The bailout showed the credit crunch that has roiled markets around the world is far from over. Big U.S. lenders like
have scrambled to finance loans after the secondary market for mortgage securities collapsed under rising defaults on recent loans to homebuyers with poor credit histories.
Investors will be bracing for another round of fallout from the subprime mess starting Tuesday, when big Wall Street banks led by
begin reporting their third-quarter earnings.