Peston pleads innocence...

gozomark

soulsaver wrote: »

No... I know you are right in the monetary limits at the time and in many cases withdrawals were logical. My point is the majority of NR accounts were small savers; the majorty of the money was bigger accounts - who clearly were right to be worried. But my point is Peston never mentioned the guarantees AT ALL.

well the other issue, even for accounts of less than 2000, was the time it would take for the FSA to pay out, and so even though 2000 was 100% guaranteed, if you couldn't access it for say 3 months it was still logical to withdraw it

Myrmidon_J

gozomark wrote: »

If I'd had 100,000 in NR and the FSA had only promised to guarantee 31,700, and it looked like NR were going bust, I'd have withdrawn my money - why take the risk?

How many of the little old ladies in the queues outside the bank had £100,000 deposited with NR?

I can see the logic in 'not taking risk' where possible; but I do think that the 'crisis' could have been managed an awful lot better - by all parties concerned.

My complaint against Peston is that his style of journalism is deliberately sensationalist; as 'soulsaver' says, there is a marked lack of focus on the actual facts of the matter - potentially catastropic in circumstances such as we are experiencing.

soulsaver

gozomark wrote: »

if I'd had 100,000 in NR and the FSA had only promised to guarantee 31,700, and it looked like NR were going bust, I'd have withdrawn my money - why take the risk ?

Well if you'd relied on Peston you wouldn't have known there was any guarantee.

sabretoothtigger

Yea gozo is on the money there, no one wants to lose 10% of their savings.
I'd say Peston is as guilty as the short sellers of destroying the bank but I'd rate the chief exec over any of them


I remember at the time there was a story of someone with 1 million in the bank holding a bank manager hostage in his office because they wouldnt give his money on the spot

Ultimately the bank relied on market funding not small consumer deposits and then it lent on the BOE so it was a failure of its business model that did it

Aegis

As I mentioned at the time, the entire run on NRK was one big example of game theory in action, specifically a multi-player prisoner's dilemma. The optimum solution as a whole would have been to leave the money alone, but the worry that others would take their money out, cause a run and leave the remains worthless made everyone want to take their money out. It just became a vicious circle after that.

gozomark

indeed, which is why the FSA quickly moved from 90% to 100% of 35000, so that most savers no longer had the dilemma (as long as they believed the FSA would pay out, and promptly)

tradetime

and promptly

Depending on your definition of "promptly" that is not looking like the case judging by various Icesave threads. The FSCS really needed to get this right otherwise it negates the whole compensation effect as people fearing losing access to their money for a prolonged period will run shaky banks anyway

tradetime

but I'd rate the chief exec over any of them

:rotfl::rotfl:Yes
"So Mr Applegarth, how long have you been a Banker?"

"I'm not actually a qualified banker."

"I'm sorry, what??"

"I have no formal qualification as a Banker."

Nice

gozomark

I think he misheard him when he said banker....

briskly_2

tradetime wrote: »

Depending on your definition of "promptly" that is not looking like the case judging by various Icesave threads. The FSCS really needed to get this right otherwise it negates the whole compensation effect as people fearing losing access to their money for a prolonged period will run shaky banks anyway

Exactly. Icesavers with instant access acounts lost around 7-8 weeks interest, some 4 months and still waiting, because of the delays in the "accelerated FSCS compensation". Those waiting until maturity of fixed term deposits have also been given misleading information by the FSCS at every turn - they were promised that claim forms would be sent "promptly" and then had to wait over 4 weeks for them (after the previous 7-8 week delay) These claims then hit the Christmas post clog up and a 10 day holiday at FSCS/Capita. To compound these delays, the promised "6 weeks or less turnaround" of the paper claims has now become a "possible 8 weeks if you are lucky". Frankly, if I had to decide whether to draw money out of a bank at the slightest whiff of trouble or wait up to 4-5 months for the FSCS to get into gear (probaly much longer for a really big bank) I would go for the former!