Northen Rock [Merged Threads]

Tommaso46

caveman- absolutely. They'll all lying to us about our money being safe. Including, I'm sorry to say, Martin. Up to £35K the Bank of England will guarantee you only 90% of your savings. So goodbye to all the interest you've been so carefully building up, plus about another 5%. That is NOT your money being safe.

To stop a run on the banks, this needs to be a 100% guarantee, without any upper limit.

All weekend I've been watching our absolutely hopeless Chancellor of the Exchequer ignoring the questions put to him, and parroting the same message about the British economy being fundamentally strong. A weak, complacent Chancellor presiding over the first run on a British bank since the 19th. century, and he doesn't seem to realise what's happening......

caveman38

Yes but I am sure plenty of NR customers are withdrawing who have less than 30K saved with them.

But in a worse case scenario you would lose 10% of funds from £2 - 35K which can amount to £1.8K for someone with £20K.
If you are unsure of NR future, you can't blame them for withdrawing their money. If they were guaranteed 100% they would not be in the queues.
I may be one of them soon, but I'm torn between losing a lot of interest and beleiving the info that the execs. and government are giving

Tommaso46

caveman - me too. I'm just HOPING they get this sorted. I don't have any money saved with NR but I'm watching my other bank accounts with some anxiety. The "don't worry, be happy" messages coming from Alastair Darling and various banking industry spokespeople are not fooling anyone. The fact that they're trying to pacify the public is beginning to show. Are things under control, or not? Why isn't anyone making the obvious connection between astronomically high house prices and astronomically high mortgages, which is the root cause of this problem?

nilrem_2

Tommaso46 wrote: »

caveman- absolutely. They'll all lying to us about our money being safe. Including, I'm sorry to say, Martin. Up to £35K the Bank of England will guarantee you only 90% of your savings. So goodbye to all the interest you've been so carefully building up, plus about another 5%. That is NOT your money being safe.

Frankly I despair that people still believe that their cash with NR is not safe, in actual fact money invested with NR is probably safer than the cash moved to other institutions, primarily because NR are the only ones who have full BOE backing!

TBH I really don't see what else the Government or bank can do, if people don't trust the backing and word of the BOE!

This NR panic surely confirms what I have said in the past; that there is no way that the government could let NR go bust and savers lose their cash otherwise the scenes at NR would be repeated at every other bank and BS in the country fearing that the same fate awaits them!:eek:

Tommaso46

nilrem - and you think that can't happen?

dunstonh

And who is going to pay for that guarantee?

Tommaso46

astronomically high house prices and astronomically high mortgages. Record levels of debt. we have been living in a bubble economy and now the bubble is beginning to burst.

Tell me why I'm wrong. Tell me Northern Rock is just a one-off.

[Deleted User]

Hello
I have not heard anyone from FSA or the government, state that NR in vestors money is always absolutely safe. There is always a qualify word in the statement, somewhere, allowing a get out.
The banks do not trust each other because they know the truth about the unknown debts 'out there'.
Yet, pensioners with their life saving are supposed to trust statements by government ministers, with their gold plated, guaranteed pensions, who have no stake in NR - get real.

Martin Lewis slip up, or sloppiness.....
Martin Lewis, on the media this morning, said money was safe with NR, but failed to point out that only 90% of monies, up to ~£33000 is returned. He also did not state that there is no guarantee when you get your money back, no matter how little the amount, if things get worse at NR.

Debt_Free_Chick

caveman38 wrote: »

The panic among savers who are withdrawning their funds could be stopped even now. All that needs to be done is for the BOE or Government to guarantee 100% of savers money ...

:rotfl: :rotfl: :rotfl: :rotfl: :rotfl:

Do you really think the people who are panicking now are likely to not panic on the back of a Government guarantee?

I rather suspect that those withdrawing their money, in blind ignorance of any understanding of the true position, are going to trust the Government even less than they trust NR :rolleyes:

Flynn_2

tightfisted wrote: »

Hello
Yet, pensioners with their life saving are supposed to trust statements by government ministers, with their gold plated, guaranteed pensions, who have no stake in NR - get real.

Yet I assume you believe the statement on all banknotes that says "I promise to pay the bearer X pounds"?

You have lent your money to NR and they in turn have lent it out to others, just as all banks do. NR lend money to house-buyers secured by the property. You get interest from them and they get interest from the house-buyer. No money has been lost, the houses are still there, and they are solvent.

If you and many other want your money back instantly they've got a problem because banks only keep a limited amount of liquid funds. So the Bank of England (the people who print the banknotes) have said NR will be able to borrow from them if they need to.

NR is now the only bank/building society backed by the BoE. Apart from gilts that's as good as it gets.