Northern Rock's share price dropped by 7% on the back of news that 70% of it's mortgages are owned by a Jersey based trust company. This means the level of assets it holds for its creditors such as the Bank Of England has been reduced.
Northern Rock does insist that this is the normal situation for the bank and not to do with the recent crisis. This is because the bank is mainly a lender and does not hold as much savings account money as other banks.
The bank has also been hit by a high normal of defaults caused by rising interest rates. As one of the biggest UK lenders it is being hit hard because of this.
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