Should I close my Northern Rock Account?

Optimist

christineb wrote: »

Has anyone manage to get on this web site today:eek:

Northern RocK have certainly done themselves no favours by allowing their site to crash or go terribly slow to the same effect, Its slow at the best of times but I tend to think it might be a deliberate policy.

I have no intention of removing my money from NR at this point but if I had needed to access my account I would at this point be seriously annoyed.

theredfox_2

If everyone panics, the situation gets worse.
Everyone is panicing.
Go figure.
Don't panic.

Its like that scientific principle, forget what its called, where the role of the scientist/observer affects the outcome of the experiment.

The mob panic here is partly why the situation's got worse. The mob are part of the equation.

melbury

What happens if, like me, you have a fixed rate bond with a set expiry date - in my case this is 1st November. I obviously cannot withdraw my funds before that time, but what will the situation be in some six weeks? Really quite worried, also have more than 35K invested with them so don't want to lose a big chunk of my savings.

dunstonh

melbury wrote: »

What happens if, like me, you have a fixed rate bond with a set expiry date - in my case this is 1st November. I obviously cannot withdraw my funds before that time, but what will the situation be in some six weeks? Really quite worried, also have more than 35K invested with them so don't want to lose a big chunk of my savings.

Why are you worried? Even if every penny was drawn about by every saver, they would still be solvent.

The media is creating the story, as is so very often the case nowadays. If you look a the facts, there is no real story here.

cloudstrife_2

Don't take my word as advice but I don't think there is anything to worry about.

Think of it like this - why would the Bank of England of all places lend large sums of money if it was widely expected for Northern Rock to go bust?!

It would just not happen if it was expected to go bust I would have thought another stronger Bank/Building Society would possibly look at a takeover and make repairs! Think damage limitation in the marketplace, no one would know in order to keep the brand reputation.

FYI I do work for a high street bank (not Northern Rock!) and have had a very busy few days with most customers spending 3 hours to get hold of their money (only by cheque/bankers draft). The cheque/bankers draft is causing another panic as customers are worried the cheques will bounce if it all goes belly up (which many think it will!).

If and only if it did go bust, like previous posters have said, there is protection in place. If you really do want to take your money and run then I do suppose you could always take it back in a few weeks after the storm.

On a final note to anyone who works front line in Northern Rock you do have my sympathy, it must be hard work right now on top of your own worries about the company. I heard some chap from our local branch had to start turning people away to ensure they could close on time today, not a easy job when you have lots of uneasy customers.

zackary71

As a Northern Rock employee, I have watched this whole thing unfold with great interest particularly as a result of the scare-mongering by the press and the media that have fuelled the scenes seen in the last 2 days. Am I alone or does anyone else see clear parallels with the so called "Petrol crisis" a while back.
Clearly mistakes have been made in the way our "Model" operates but when you've got the Chancellor, the F.S.A. and the British Bankers Association all saying "don't panic", I'd back their judgment over the average man in the Street anyday. Please remember that N.R. holds £115 BILLION worth of assets and I for one am not worried one bit about my job security.

theredfox_2

Stupid mob mentality.
I'm sorry, and understand individual worries, but that's exactly what this is.

hibees1875_2

Er, northern rock arent the only ones to borrow from the bank of england in this way this year. Barclays have also done the same to improve liquidity as have several other large financial institutions. This is something that fairly routinely goes on. The difference here being that 1)subprime loan markets is newsworthy at the moment 2)northern rock is largely reliant on its loans system with other banks (as is well documented in the press so iwont go on about it here).

I think someone has been very clever in hyping up this story, thus driving the share price down and also by scaring people to withdraw savings which also devalues the companies worth. recent interviews by the ceo of NR seem to suggest some form of buyout or takeover in the next year is imminent and with barclays and RBS fighting it out over dutch group abn amro it could be that someone like hsbc is looking to capitalise on a slightly different target.

The FSA has strict guidelines for banks and they and the bank of england ensure solvency for banks. ultimately the bank of england will be underwriting savings debts upto 35k as previously stated. mortgages business will be bought by other lenders as is the way usuallly, this has been the case before and will be again, for the basic fact that someone with a mortgage has something to offer, ie either 1)money or 2)a property which can be exchanged for money.

All the other banks have been lending to NR in the past, so why shouldnt the bank of england do it now. there is no difference.

Im not sure what benefit there is by taking money out of NR accounts other than wasted time in a queue..... but then i dont h ave a NR account so it's easier for me to say. But remember, all the other banks borrow from the BoE all through the year and for similar reasons to NR. It's just odd how this time it seems to have hit the media. I'd keep my money in NR in case there is a buyout as it might mean a little windfall for account holders.... it's happened in the past (and i don't mean with building societies)

Plus this is a good way to keep our minds off the fact that petrol prices keep creeping up to the £1 a litre mark..... coincidence? perhaps? or maybe bush is just about to invade iran and thats why oil prices are going up... but i digress...

notatroll

“Brought down by its customers. Takeover is imminent. Bidders to put offers on through Merrill Lynch from Monday.”
It is in times like these you absolutely hate media don’t you?
If there is a property crash I can even tell who would be responsible for starting the panic...

theredfox_2

"However, sources close to the company said that if customers continued to draw their deposits at the same alarming rate, Northern Rock would be forced to break up."

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/09/16/cnrock116.xml

I often don't like the media either. In fact its more than often. But comments like that are just reporting the facts, they are not the problem. The problem is mob panic - or at least, that is part of the problem, in addition to the financial situation.