Northern Rock shows fallibility of communication

The run on Northern Rock, a British mortgage lender, illustrates the potential downside of central bank communication around stability issues, says Gary Stern, the president of the Minneapolis Federal Reserve.

"Policymakers hoped the announcement of central bank support for Northern Rock would quash depositors' inclination to pull funding. It had the opposite effect; government support reinforced concerns about Northern Rock's solvency and depositors' access to their funds," Stern said.

He added

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@centralbanking.com or view our subscription options here: http://subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact info@centralbanking.com to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

Register for Central Banking

All fields are mandatory unless otherwise highlighted

This address will be used to create your account

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account

.