Northrn Rock follows the Bradford and Bingley -suspending interest payments

Northern Rock Pibs lose 80pc of their value following the announcement that the nationalised bank will suspend interest payments.

PIBS are Permanent Interest Bearing Shares they were a popular choice among Investors are they operated rather like a gilt in that they would not normally be eve redeemed but the capital price would vary depending on the interest rate. Many were also bought by Institutions. The Northern Rock is the second former Building Society to suspend payments in PIBS following the Bradford and Bingley decision last year.

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