Northen Rock [Merged Threads]

MSE_Martin

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.

I have appeared on GMTV and Radio 5 today. On both I explained you get 100% of the first £2,000 back and 90% of the remainder. Not sure what you were listening to - but it was probably someone other than me if that wasn't said!

littlesaint

Hi Martin, can we have a bit more information for shareholders too please. I had hope to hang on to mine, but am reconsidering. I posted three questions on another thread which I'm hoping that someone will answer.

Tommaso46

that's right, Martin, "90% of the remainder". So goodbye interest, and goodbye another 5% or so on top of that.

This is no guarantee at all. It's a guarantee that you'll lose out, massively.

Flynn_2

Give the guy his due.

The press are having a field day. It's a great story that sells papers. They don't care that the result is that some people have cashed in their cash ISAs and bonds.

Martin Lewis to his credit isn't ramping up the hysteria and is telling it how it is. Surely everyone now understands the political reasons why savers are now safer with NR than they were before all this blew up.

zag2me

Don't forget if northern rock does go under and people are forced to wait for compensation, they will only get 90% back, and loose the interest while they wait for it to come through, possibly not even have access to their life savings for a long time.

No wonder people are panicking!!

steve_IOW

Martin was Correct in his statement,The point Martin was making was:
That if you Panic and withdraw your money from NR, you still have to put it somewhere!! and All Banks and Building societys have the same FSA guarantee.
The Only Place you can get a 100% guarantee for your money is "National Savings" which are backed by the Goverment 100%. but then may suffer losing out with lower intrest.

confused1

It was panic and hysteria that started the long Depression of the 30's. Please don't repeat it. Stay calm to contain it.
The one finger to point to is Brown. He wrecked and stole our pensions. Those who were able to pick themselves up are now worried to death about the frugal savings they have in the banks and whether that will disappear too.
Did I hear some say that Brown was the greatest Chancellor we have ever had? With someone of his calibre, we do not need the worst.

Arnie22

Has anyone yet actually got their hands on their money after withdrawing it via CHAPS? My money (which I need - haven't closed N. Rock account) has disappeared from N.Rock, but is not in pending transactions and has not yet appeared in bank it was transferred to.

old_codger1

MarkyMarkD wrote: »

More than it's got, as in more than it has to deposit with the central bank - yes.

But so what? It's not creating money, as the video suggests. It's using depositors and other banks' money to fund lending.

Which is creating money, like it said. My house, probably like yours, is now worth twice what it was 6-7 years ago. Where do you think that 'money' comes from? It comes from someone sign signing a mortgage for that amount of money.

MarkyMarkD wrote: »

If banks ran the way the video seems to suggest they should, they wouldn't exist.

Wrong! They'd exist... they just wouldn't be anything LIKE as profitable or as large.

MarkyMarkD wrote: »

They wouldn't make anything like the necessary return on capital to justify the risk of investing in a bank.

How is that an argument against the accuracy of the film?

MarkyMarkD wrote: »

Most banks make around 20% return on capital. If they funded all loans from their share capital, they'd make less than 1% on average unless rates changed - which obviously they would.

Or they'd just make a lot less money.

In any event who said anything about only loaning from their share capital? The point of contention is whether there should be some restriction on the amount of money they can create with nothing behind it, i.e. whether the fractional reserve level should be infinite. They should, and can, lend out money deposited as well as their share capital.

The film then extends the point to argue for some kind of change to the world banking system and, I agree, that's more problematic but the basic premise of the film is unarguable. Galbraiths 'Money: Whence it came, where it went' says essentially the same thing as this film.

kezmoz

The government misses every opportunity to include personal finance education in the curriculum. As a teacher of a fully accredited qualification in this subject my students will ABSOLUTELY be taught about the Financial Services Compensation Scheme this year - how it works and what guarantees it offers. I wonder how many of those people standing for hours in the queues outside branches had even heard of the scheme (before the weekend) or have faith their money is secure? The media has overhyped the situation, though I do not wish to undermine the seriousness of recent events, it does reinforce the need for education and awareness of how this industry works - it affects us all.