Northern Rock Crisis Article Discussion

regularsaver1

I'm sure they wouldn't allow someone to draw a million in cash??? Because they would not have it in branch

horsepills

[Deleted User] wrote:

I've just managed to get money out of internet saver today

I doubt you're the only one who hit the panic button and now wishes they'd been a little more patient. But who needs Bank of England assurances now you've got your money? Just bury it under the floorboards and barricade yourself in!

harryhound

harryhound wrote: »

The only way to stop this spreading to other banks, if for the Bank of England to GUARANTEE ALL the NR retail depositors (Only 30bn!).

Anybody got a better suggestion?

Harry.

In USA, and perhaps next year in Britain, not to mention Spain, a lot of money is being written off. Somewhere there must be casualties.
The headless chicken panic is because nobody knows who it is going to be. Logically it should be the shareholders and foolish borrowers, not the depositors.

Thank you "Darling" for taking my advice, let us hope it is not too little too late. My current & net account is with the Alliance & Leicester, I was just about to spend the night trying to shuffle things about.

Let us hope we can all draw breath and the Bank of England wakes up
to its responsibilities - there is still trouble out there mainly caused by failing USA mortgages and a falling dollar (so even good mortgages have been a bad investment in terms of pounds sterling).

Harry.

On a lighter note, did anyone else hear the joke announcement from Nationwide: The current turmoil has resulted in a revision to the house price forecast of 10% increase per year down to 7% - what planet are they on?

brasso

scraps wrote: »

Hello everyone, this is my first ever MoneySavingExpert post! This is a fantastic board with so many knowledgable people posting, its a great source of advice!

The query:

I took out a Northern Rock loan for £15,000 4 years ago. Unfortunately i've been in repayment difficulties since then and am an only paying approx £80 a month at the moment. So far I have repayed £4000.

This afternoon I thought there might be an opportunity to consolidate the loan cheaply if the bank was in trouble. Cheeky I know! They offered me a settlement figure of roughly £14,700, I offered them £7,000 and they didn't even try and start a negotiation!

Its almost certain Northern Rock WILL be taken over or go under. If they get bought out in current circumstances surely my debt wouldn't be valued at 100p in the pound and would be bought at a MUCH cheaper rate in the grand scheme of things? Even though I got flatly refused today, Is it worth me ringing up Northern Rock every day for the foreseeable future to ty and get a VERY good settlement or am I being wildly naive and deluded? If I did try and phone once a day could this have adverse affect any any way? Can anyone give me advice?!

Thanks for reading!

Learn to manage your finances like a grown-up, instead of hoping to benefit from someone else's misfortune.

If you've taken £15,000 from this company, then you have to pay it back, plus the interest accruing.

That's it.

Rio_3

I have a 1 yr. fixed rate bond with Northern Rock which is due to be payed up in about 4 weeks, what will happen with my Money and will I lose any of it: confused:
Eunice

caveman38

Wrong thread

scraps

brasso wrote: »

Learn to manage your finances like a grown-up, instead of hoping to benefit from someone else's misfortune.

If you've taken £15,000 from this company, then you have to pay it back, plus the interest accruing.

That's it.

I do manage my money like a grown up - NOW! I've made financial mistakes in the past and are paying for them. If Lloyds takeover £20 Billion of Northern Rock debt do you really think with the current share price they will pay a full £20 Billion for it, of course not.

It may not be an entirely honourable attitude, but then neither was the US banks attitude when irresponibly lending money to people they shouldn't, sometimes with incredibly deceitful clauses in the contracts. The UK banks weren't exactly responsible when buying up this repackaged debt to make profit. And now the goverment (and that means UK taxpayers) are guaranteeing Northern Rock deposits (and rightly so!) because of Northern Rock's irresponsible lending practises (maybe Northern Rock haven't behaved in a grown-up fasion of the last few years).

We all make mistakes, oviously the banks aswell as me, I was only behaving with exactly the same mindset as they would in similar situations. Who-ever buys out Northern Rock will pay as little as possible, (almost) their only regard will be how little they pay for them.

I want to get out of debt as quickly as possible. If there is even the slightest chance of negotiating hard (BUT FARLY) to reduce what I have to pay back, then I WILL do it.

I don't have a moral issue with. If I had the opportunity to buy my own debt back cheaply instead of have another bank do it and make money off me why shouldn't I do it?

From the few responses i've had, that really doesn't seem likely :beer: , but I still think it was worth asking the question.

Thanks for your response.

deary65

copied from hpc forum

Does anyone know how the Financial Services Compensation Scheme actually works?

I had assumed it was some sort of pot of money - held by the Bank of England - to pay out if things went wrong.

Its seems from reading their website that it is, in fact, a levy on the rest of the financial sector - to which they have to contribute if a bank collapses. So, there is virtually no money in reserve, and it relies on the other banks having enough cash to pay out. Last year they paid out £149m (mostly on small stuff), and their reserves were £139m - small change compared to Northern Rock.

When you poke around on the FSCS website - you find they actually say that big events might occur, and would put a limit on how much they could pay out in total. There are various documents on their website - if correct, it seems they might have about £2bn to play with, and proposal to increase that to £4bn in 2008.

However, that £2bn or so, relies on other banks ponying up the funds - which in the current climate doesn't look likely!

Their press release says they can't interfere yet, and say that the FSA are saying Northern Rock is sound.

For large events, they pass the buck back to the chancellor and Bank of England under the so called "tri-partite arrangements"

It seems to me that the £31,700 is wishful thinking for something the size of Northern Rock.

regularsaver1

The Financial Services Compensation Scheme was established under the Financial Services and Markets Act 2000 to provide protection to customers if companies experience financial difficulties.
It covers different types of investments in different ways.

Where a customer has made deposits in a savings or bank account, payments under the scheme are limited to 100% of the first £2,000 and 90% of the next £33,000 of the customer’s total deposits, subject to a maximum payment to any one depositor of £31,700.

maypole

Rio, My NR fixed rate bond matures in 2 weeks, I have just filled in the instruction form and sent it off, so I am confident that my money will be paid into my bank, especially after todays announcement by the chancellor.