(Plenglish) - The first sign of the negative effects of the US real estate crisis was evident in the United Kingdom on Friday, when the British bank Northern Rock requested aid from the emergency reserve of the Bank of England.
Previously, the bank had sought funds from other sources, but 6.4 billion dollars injected into the system by the issuing bank ran out in less than one hour on Thursday.
As a result, the stocks of the Northern Rock, the fifth major mortgage bank in the United Kingdom, dropped more than 20 percent in the London Exchange when the news about the bank's poor liquidity was made public.
Keeping clients calmed was the bank's first concern on Friday, due to the unrest caused by the lack of funds.
According to analysts, the Northern Rock's request for emergency funds might be followed by other British banks, thus creating a dangerous situation.
High-risk mortgages with no guarantees to recover the money and the deterioration of the real estate market in the United States created a liquidity crisis that has spread to other countries.
The participation of European financial institutions in the US mortgage market has created shortages in bank funds.