Northern Rock is a UK bank. In 2007 it ran into serious trouble. In 2008 it was nationalised.
The bank focused heavily on residential mortgages, funding them through short-term borrowing on the wholesale money markets.
In 2007, there was a crisis in confidence as lenders in the U.S. realised they had pushed too much money towards sub-prime (low quality) residential borrowers. The money supply from the money markets dried up.
With nowhere to go for replacement funds, Northern Rock asked the Bank of England for an emergency loan. When everyone heard the word 'emergency', depositors and lenders became very nervous and started to pull away from the bank. To calm things, the UK Government guaranteed all deposits.
In 2008, having made huge loans and guarantees on behalf of the taxpayer, the Government decided to put the bank into public ownership.
