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Met loaned £39million to help Rock
Jonathan Prynn, Evening Standard19 Sep 2007
Major London bodies have lent tens of millions of pounds to Northern Rock in recent weeks, it emerged today.
The Greater London Authority, the Metropolitan Police and the London Fire Authority all have short-term loans outstanding with the stricken bank.
The Met is believed to have lent as much as £39 million to Northern Rock but insists the loans are "financially sound". The London Fire Authority has a total of more than £16 million owed and the GLA, under the leadership of Ken Livingstone, lent £5 million as recently as last week.
The loans are all thought to be safe as Northern Rock can rely on the Bank of England's financing facility.
However, it does raise memories of the BCCI crash in 1991 when the Scottish Western Isles council lost £24million.
Brian Coleman, Conservative spokesman on the London Fire Authority, said: "It beggars belief that the GLA could have given a loan to Northern Rock when it was blindingly obvious that this was a bank in trouble."
