This all comes as no surprise. I remember that lovely product called an endowment mortgage. Any forecasts for banks getting into difficulty, and is Commercial RE having (likely to have) problems of the same scale?
I understand that Northern Rock is using a charity in Jersey (which came as a bit of a surprise to the charity), to funnel the top layer of business into a holding company called Granite, who would reciprocate by providing funds to write more business. It’s said that it the conveyor belt stops, Northern Rock won’t be able to honor it’s bailout loan. Moreover, many Northern Rock customers are rather peeved that all the crap as left onshore, while the best business was moved offshore presumably out of reach.
