Northern Rock Crisis Article Discussion

mystic_trev

MSE_Martin wrote: »

I've just added the following update to the article

Update Note 6.36pm 17 Sept. Chancellor announces 'savings guaranteed'

The Chancellor has just announced that "I want to put the matter beyond doubt. In the current market circumstances, and because of the importance I place on maintaining a stable banking system and public confidence in it, I can announce today that following discussions with the Governor and the Chairman of the FSA, should it be necessary, we, with the Bank of England, would put in place arrangements that would guarantee all the existing deposits in Northern Rock during the current instability in the financial markets.

"This means that people can continue to take their money out of Northern Rock. But if they choose to leave their money in Northern Rock, it will be guaranteed safe and secure."

Sadly there are no more specifics than this, yet it should lay to rest many fears. This commitment means that not just the £35,000 is safe, but all money in Northern Rock is safe. It is likely the number crunchers have worked out the liability a bank like Northern Rock could leave and have provisioned to cover it. Good news... if only it'd be said last Friday.

I'm not sure the Government can do this as it seems to breach EU Regulations

Rio_3

Hello & Thank you Maypole. hope you are right. worried sick though
Eunice:hello:

JDinho

horsepills wrote: »

These brainless idiots queueing up outside branches of Northern Rock should be given ASBOs. :mad:

The banking system is based on trust, the mis-management of the affair has cost NR its savers trust. I think these customers are perfectly entitled to withdraw their money even if they are below the threshold of the FSCS.

The same prinicpal applies to lending money to people, the bank trusts you to pay back the loan. If you make a balls of doing that, you won't be lent money so easily in future.

...which ironically is the source of NR's problems!!!!

dwileflunker

Does the Chencellor's announcement now mean that all NR accounts still left intact have now become gilt edged investments, unlike deposit accounts in other banks? If so I'm glad I didn't panic.

nilrem_2

Rio wrote: »

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

Well TBH I am confused with your question? Why should you think you might lose any of your money?

AFAIAA not one single saver has lost any money during this NR situation the only money lost will be the interest that people lose by moving their savings.

I really don't see that you have anything at all to worry about!

horsepills

JDinho wrote: »

The banking system is based on trust, the mis-management of the affair has cost NR its savers trust. I think these customers are perfectly entitled to withdraw their money even if they are below the threshold of the FSCS.

I agree, but is it really necessary to run immediately to the bank, queueing up for hours, clogging up branches, causing more people to panic, etc...?

wrkactjob

"The government has said that it will guarantee all deposits held by the embattled Northern Rock bank.

The pledge by Chancellor Alistair Darling is an attempt to reinforce confidence in the beleaguered firm.
More than £2bn has been withdrawn by customers since the bank applied for emergency funding from the Bank of England last week.
Northern Rock shares were 40% down at one point on Monday and ended 35.4% lower as fears grew for its future.
Banks are already covered by the Financial Services Compensation Scheme which protects 100% of the first £2,000 in any bank account and 90% of the next £33,000 - giving a maximum payout of £31,700 if a bank did go bust. But under the measures unveiled by Mr Darling, Northern Rock savers would not lose a penny, regardless of how much they had deposited."

On that basis, and returning to an original question, do you think we are likely to see more people buying the shares at £2.80 when trading opens tomorrow?

I think a fast buck could be made tomorrow by those willing to gamble, cant see the price continuing to fall to say Below £2 now the government has stepped in with this promise.

caliston

A minor note on the FSCS £35K amount... don't forget to allow space for interest. In an account with £35000 at 6.3% you'll earn £2205 per year gross which will push you over the threshold. So that interest won't be protected. Either leave a gap, or (if you account allows it) have interest paid into a high-interest account at another bank..

freebo_2

I walked past the NR branch in The Galleries shopping center in Washington Tyne & Wear at about 1PM today (Mon 17th), the queue to the tellers was only about 10 people, so if you're desporate its probably quicker to drive there than queue all day :money:, quite nearby in Hexham I hear the queues where huge


Mike

P.S. IMHO, there's no need to pull your money out of NR, but if you've decided to you may as well not have to queue all day, its probably quicker to drive to Washington than wait all day even from as far away as Kingston (although not as pleasent an area :rolleyes:).

itgirlinuk

Apparently Northern Rock is offering more than 6.5% interest for the people who save with them with the goverment guarantee...

BBC2 says this is the best offer out there.