It has emerged since the crash of Northern Rock that many UK financial establishments are actually turning down new business which they would normally have taken on at a seconds notice.  They seem to be under strict orders to keep assets as fully intact as possible, and not open themselves up to over stretching, such as in the case of Northern Rock.  So when will this change?

The credit crunch has not only effected the borrowing financials, it has effected the lending companies who are not as keen to let go of their money at the moment. Unless there is as near to zero risk as possible they have been seriously considering their positions, which will ultimately improve their bad debt situations but possibly reduce their short term profitability.

Those who thought that Northern Rock marked a turning point in the crisis are set to be sorely mistaken, with many analysts forecasting further sector difficulties in the short to medium term - indeed there are even reports that the industry may well let Northern Rock “die a sad death”.  None have been forthcoming to bail the company out, and the longer this goes on the less chance of the company making any kind of revival. 

There is even talk of the authorities stepping in again to finance the company, but this will never happen as that would mean crossing the line to the free market.  Sadly the days of Northern Rock are numbered, unless a bidder comes up very soon!

The credit crunch is set to claim more scalps in the States, with rumours that some of the big players may be experiencing difficulties.  Until the credit crunch has run its course, and no amount of State aid or extra liquidity will effect this, the system will still be on red alert for difficult situations.