“Other assets” on the Bank of England’s balance sheet rose by £2.0 billion in the week to 14th November following a £500 million gain in the prior week. The cumulative rise since Northern Rock imploded is now £25.3 billion.

Is the Bank providing covert support to banks other than Northern Rock? It is possible but unlikely. In an interview conducted on 1st November Northern Rock chairman Bryan Sanderson stated that the loan was “not quite £20 billion”. This figure compares with estimates from the Bank return of £20.6 billion on 24th October and £22.8 billion on 31st October. Mr. Sanderson may have been referring to the size of the loan a few days earlier, i.e. nearer 24th October than 31st. The discrepancy could also be explained by a rise in other components of the Bank’s “other assets” since it started to lend to Northern Rock. In testimony to the Treasury Committee, Bank of England Governor Mervyn King stated that the Bank was unable to lend covertly to Northern Rock because of the Market Abuses Directive, although this interpretation has been denied by the European Commission. Term interbank rates have been stable in recent weeks and might have been expected to rise if other banks were facing significant funding difficulties.