While there has been much speculation about the future of Northern Rock, it has today been reported that the emergency loan of £2.9 billion form the Bank of England has now increased to some £8 billion.  How will the loan get repaid? Will it get repaid? Who will takeover the bank now?

While supposed takover talks continue, many are now asking who will actually step in to buy a bank which already owes £8 billion to the Bank of England? Even though the loan is being used to keep the bank afloat, it will need to repaid at some stage as and when the bank is sold / split up.  As the loan increases, so the chances of someone buying the bank outright reduces.

When will the emergency funding stop? How high can the loan go?

These are all questions which are being asked of the Bank of England and the Financial Services Authority who are in charge of administering the banking regulations.  Will the bank say enough if enough very soon as there is no way that this can  continue indefinitely?

While the credit crunch is continuing, all be it at lesser degree than a couple of weeks ago, it now seems that the Northern Rock is damaged goods.  As and when the credit market returns to normal, will anyone ever touch Northern Rock again?

While the saga continues to rumble on, it seems that we are seeing more new questions than answers.  The situation will need to be resolved as soon as possible, because at the moment the Northern Rock is looking more and more like the living dead than the walking wounded.