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A matter of facts

What happened to British banks?

By Stephen Nickell   April 2009

Why are the people of Britain suffering such severe punishment? Answer: because of the credit crunch and recession. So what is a credit crunch and why are we in the midst of one in Britain? Best to start by asking, what is a bank? Basically, it is an institution which borrows money from some people and lends it to others. This is risky because much of the money is borrowed from people, such as depositors, who expect to get their money back whenever they want and is lent to people, such as mortgage holders, who expect to retain their loans…

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