Banks collapsing. How long do you have between warning signs and it happening?

PauliPauli

How about Tesco Finance?

Surely their quite safe in event of a serious banking downturn ... and accepting/receiving faster transfers (useful if you bank with a bank which also is accepting/receiving faster payments, like HSBC)?

Aegis

PauliPauli wrote: »

How about Tesco Finance?

Surely their quite safe in event of a serious banking downturn ... and accepting/receiving faster transfers (useful if you bank with a bank which also is accepting/receiving faster payments, like HSBC)?

Operated by RBS aren't they?

jamesd

davidmt83, most likely is an arranged takeover or appointment of another institution to manage the accounts and access as normal the next day. If that's not doable the next option would be a few months for all but a couple of weeks for hardship cases.

PauliPauli

Aegis wrote: »

Operated by RBS aren't they?

They seem to have their own FSA agreement now, read (can't remember where) that they had recently become a "real" bank ??

dunstonh

Tesco has/was applying for its own banking licence and intended to drop RBS once they had set everything up. That was about 2 months ago. So I doubt they are running under their own steam yet.

martinman3

I find it quite funny that while you were talking about a potential bank failure one actually happened but this time it was dealt with correctly by the FSA.

6 banks, (HBOS, Abbey, Barclays, Lloyds TSB, Royal Bank of Scotland and HSBC) have been "encouraged" by the FSA to buy all the B&B shares that the underwriters of the failed rights issue weren't forced to buy.:rotfl:

http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=446906&in_page_id=3&ct=5

I assume that if it failed as nobody wanted to take up the rights issue then they would be paying up through the FSCS anyway and this way at least they have the shares.:rotfl:

martinman3

By the way, I believe it is extremely naive for you to think that the media is to blame for the problems in the banking sector.

The banking industry is based on perceived confidence, Northern Rock were still providing mortgages up to the point where the Robert Peston make his report. It was well known in the city that NR had been trying to raise capital but failed. The board of NR carried on business as usual as if they were expecting the FSA/BOE to step in before the cat was out of the bag but the FSA/BOE didn't, until it was too late and the queues had started.

If you want one reason why NR happened as it did it would be that Treasury/FSA/BOE actually thought that it was impossible for a bank to collapse in the UK under the system that Gordon Brown had set up and so they weren't looking for one.

PauliPauli

dunstonh wrote: »

Tesco has/was applying for its own banking licence and intended to drop RBS once they had set everything up. That was about 2 months ago. So I doubt they are running under their own steam yet.

looks like its been agreed (although couldn't find any more info since beginning June on this)...

http://uk.biz.yahoo.com/01062008/325/tesco-agrees-buy-rbs-stake-jv.html

Also Tesco seems to have a separate FSCS registration from RBS, and RBS only owns 50% of Tesco Finance (soon to be 0%)

So with above in mind, would you agree Tesco is probably one of the safest banks out their next to NR and NSI?

BenL

There was a post a few weeks ago about the plans Northern Rock drew up if a run was going to happen again.

It involved the whole place being shut down, websites offline, phones offline and branches shut and barrakaded to stop the run.

I would think after what happened lasttime most banks/Building societies would have a similar plan to stop the massive flow of money out.

When the dust settles they would probably be bought by a competitor or the government would bail out saving the money and not calling on the FSA £35K which actually they do not have and call from all members of the scheme to compensate for one of their own going under.

dunstonh

By the way, I believe it is extremely naive for you to think that the media is to blame for the problems in the banking sector.

That would be too extreme. A better way of putting it would be that Northern Rock were falling over the cliff. The media just made sure that it was well and truly pushed over rather than it trying to cling on long enough to be rescued.