Northern Rock Bank was the scene of the first UK bank run in living memory. It sustained large losses as a result of big acquisitions of dubious "mortgage derivative" debt securities (such as collateralized debt obligations) that are now revealed as worth little or nothing. "Northern Rock's Drawn-Out Dirge" http://ftalphaville.ft.com/blog/2007/12/13/9608/northern-rocks-drawn-out-demise/ It carried its long-term investments on money it borrowed at short term on the assumption that it could roll over those borrowings in perpetuity. It assumed that there would always be a positive "spread" between the interest it received on its long-term lending and the interest it paid on its short term borrowing. Those assumption were proved false as Summer '07 ended. "Why Northern Rock Was Doomed To Fail" by Iain Dey. http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/09/16/ccredit516.xml&DCMP=ILC-traffdrv07053100 The next linked article by Paul Tustain of Bullion Vault shows whose pocket is to be picked to make Northern Rock's creditors whole: "We learned yesterday that the British government's guarantee to bail out Northern Rocks creditors is worth a staggering £100 billion. That's £5,000 [$10,000] per British household." "Train Wreck Imminent" http://goldnews.bullionvault.com/train_wreck_imminent The profits accrue to politically well-connected plungers who take crazy risks The losses accrue to the politically insignificant taxpayers.