Alliance & Leicester and Bradford & Bingley are unlikely to be hit by similar problems to Northern Rock despite share prices slumping earlier this week.
A&L’s share price fell by 31 per cent and B&B by 15 per cent on Monday but prices rebounded on Tuesday with A&L up by 26 per cent and B&B by 4.6 per cent by lunchtime.
Both banks, along with Paragon, were rumoured to be included in an FSA investigation into funding following Northern Rock’s crisis, which all three have denied. It is understood that the FSA was looking at the issue of funding across the market.
Robert Sterling managing director Kevin Duffy says: “I would be surprised if any other lender followed in the same way, as the Government and the FSA will now be much quicker in their reaction after the lack of joined-up thinking on Northern Rock.”
A total of 27 million A&L shares were traded on Monday compared with the daily average of three million. On Tuesday morning, 11.5 million A&L shares were tradedA statement from B&B says: “We are well funded, having completed sizeable securitisations and covered bond transactions in May and June.”