Northern Rock Crisis Article Discussion

luv_my_brass

JayTee99 wrote: »

As the dust began to settle, it was obvious to me that NR had been severely damaged by this debacle. It seems unlikely to me that they can just pick up from where they left off. But that's just my opinion.

Not closed any accounts. Left the ISA alone, but now transferred most of the money away from the main account. I had been intending to spread it more thinly; this crisis gave me the incentive to do so.

Opened up several new accounts with Banks/Bulding Societies. Some are already fully operational, one is almost there.
But there is one that hasn't even had the decency to email/write to me, acknowledging my application, despite a couple of phone calls. I won't name them - Yet... they may come good (not seen them mentioned on here these past two weeks).

No doubt these transfers have cost me money, but no matter, this was a 'wake up call' for me to take some action. I don't feel happy exceeding the present protected limits for savings (not even with NR ).

and yep, still got the original shares from flotation .... Oh dear!

I had already transferred some funds from NR to ING (to take advantage of a £100 offer) and the ensuing NR fiasco prompted me to open up other online savings accounts - with Coventry BS and Icesave. I received prompt attention from all three. I was able to transfer money (via my bank a/c) to Icesave online, Coventry required a cheque, but that was no problem. All three accounts were up and running within days. :T

Ian_W

CDRputtick wrote: »

Am I wrong in thinking that if a Company of which Northern Rock is, goes broke then all of the Accounts and assets are frozen until the Liquidator has investigated the company affairs and no amount of guarantees will allow the liquidator to pay out until the investigation is complete? Surely, this will take many years to achieve. Meanwhile no funds will be available to savers.

Yes I think you are wrong.
You'd have a claim for your deposits [up to the max] against the FSCS.
I have no experience of this situation, neither has anyone else AFAIK, but did have to claim back some years ago from a failed tour company against the ABTA bonding [or whoever it was] and a full refund was paid out fairly quickly [weeks rather than months] against a signed form that the protection scheme would receive any money eventually paid out by the liquidator.

chris1

Ian_W wrote: »

Yes I think you are wrong.
You'd have a claim for your deposits [up to the max] against the FSCS.
I have no experience of this situation, neither has anyone else AFAIK, but did have to claim back some years ago from a failed tour company against the ABTA bonding [or whoever it was] and a full refund was paid out fairly quickly [weeks rather than months] against a signed form that the protection scheme would receive any money eventually paid out by the liquidator.

It's my understanding that it takes a minumum of six months to be reimbursed. I don't have personal experience but others have reported 6-12 months. Apparently one of the issues fuelling Northern Rock queues was not only whether people would get their money but when.

Ian_W

chris1 wrote: »

I don't have personal experience but others have reported 6-12 months. Apparently one of the issues fuelling Northern Rock queues was not only whether people would get their money but when.

IIRC the last Building Society to go bust was in the 1890's so I don't expect there are too many first hand recollections of it.
AFAIK no bank covered by the FSCS has ever gone bust [I don't believe Barrings or BCCI were covered by that or the previous BoE schemes].

So where do people have experience of 6-12 months delays?
From other financial institutions gone bust, eg insurers or IFA's covered by the scheme?

Or Urban Myth - or t'internet? :rolleyes:

keredewor

Hi Everybody

This is the first time I have used this site so hello to everybody, strange that really considering I rate Martins comments/views/advices very highly.

HERE IS MY DILLEMA (AND I AM SURE OTHER PEOPLES TOO) RE NORTHERN ROCK.

I am an existing NR customer, my reading of both the NR statement on its website and the HM Treasury statement link in the NR statement with regard to funding of NR is that I fall in to the category of "Guarenteed".

However, what I do find disturbing is the caveat "HM Treasury Funding guarentee is in place until market conditions stabilise" and this in my view is a problem because it gives, probably fairly, no time limit of support and therefore to make a judgement to re-invest fairly difficult.

My personal dillema is that I had a bond, in a significanrt amount, that matured on 01/11/07, I have now closed the account and received the funds less 92 days of interest amounting to a > £3500 loss.

As all existing accounts in the period up to 19th September 2007 are "Guarenteed 100%" and "IF" the sums withdrawn are re-invested back in to the NR account prior to 5th October 2007 NR state that I will receive all lost interest and any costs incurred in "CHAPS" transfer.

NOW YOU CAN SEE MY DILLEMMA.

The share price keeps tumbling which makes the business more vunerable to Administration as each day passes.

1) Do I bite the bullet and take no more risk and lose the £3500.

2) Do I re-invest the amount withdrawn as if nothing happened and let the bond run its course for 26 days (05/10/07 to 01/11/07) and in doing so in my re-investment instructions write to confirm that all funds are to transfer to my external account immediately on the maturity date (By 01/11/07)

I would HATE to lose £3500 when all I did was act to protect my own interests...........what do you all think.

PLEASE.......no sniping comments, constructive help is what I am after here.

Thank you

harryhound

I see your problem.

A week is a long time in politics BUT for what it is worth I would put the cash back in until November (but I would not go on holiday for 3 months).

A much bigger problem is working out what to do with it then. It is impossible to balance risk and reward, because we just do not know where the bodies are buried. (Northern Rock in its submission to the BoE suggested they had not got many). For example how many new flats does Mortgage Express have on its books?

Any ideas anyone.

Harry.

Watch out for lenders that have trouble meeting their scheduled annual account dates (and pass on the rumours here if you are an auditor;)).

keredewor

Thanks

Anyone Else have any opinion on MY DILLEMA
____________________________________________________________________________________________________

I am an existing NR customer, my reading of both the NR statement on its website and the HM Treasury statement link in the NR statement with regard to funding of NR is that I fall in to the category of "Guarenteed".

However, what I do find disturbing is the caveat "HM Treasury Funding guarentee is in place until market conditions stabilise" and this in my view is a problem because it gives, probably fairly, no time limit of support and therefore to make a judgement to re-invest fairly difficult.

My personal dillema is that I had a bond, in a significanrt amount, that matured on 01/11/07, I have now closed the account and received the funds less 92 days of interest amounting to a > £3500 loss.

As all existing accounts in the period up to 19th September 2007 are "Guarenteed 100%" and "IF" the sums withdrawn are re-invested back in to the NR account prior to 5th October 2007 NR state that I will receive all lost interest and any costs incurred in "CHAPS" transfer.

NOW YOU CAN SEE MY DILLEMMA.

The share price keeps tumbling which makes the business more vunerable to Administration as each day passes.

1) Do I bite the bullet and take no more risk and lose the £3500.

2) Do I re-invest the amount withdrawn as if nothing happened and let the bond run its course for 26 days (05/10/07 to 01/11/07) and in doing so in my re-investment instructions write to confirm that all funds are to transfer to my external account immediately on the maturity date (By 01/11/07)

bristolleedsfan

keredewor wrote: »

Hi Everybody

I am an existing NR customer, my reading of both the NR statement on its website and the HM Treasury statement link in the NR statement with regard to funding of NR is that I fall in to the category of "Guarenteed".

However, what I do find disturbing is the caveat "HM Treasury Funding guarentee is in place until market conditions stabilise" and this in my view is a problem because it gives, probably fairly, no time limit of support and therefore to make a judgement to re-invest fairly difficult.

government/treasury are involved in making sure the northern rock problem is sortest asap so the length of time the guarantee lasts for is irrelevant as NR will be sold/broken up whatever it takes to get rid of the problem, government has said it doesnt care less if shareholdings are worthless.

so deposits in NR will be protected until NR problem is sorted( which will be sooner rather than later) is the answer.

keredewor

So I guess you consider that I should re-invest the amount refunded (> than FSA covers) as in your opinion it is a "No Risk" situation, at least in the period until the Bond matures on 1st November 2007.?

heathcote123

Martin

The piece below was written in an article on your site - I'm not sure if it was you yourself or a contributor.

Given that Darling has now clearly reneged on this promise, offering only protection up to 35k on existing accounts 'untill the crisis has passed' , will you be updating it?

Your trust in knee-jerk party spin, imho, is touching but somewhat naive! - It would be shame for readers to take a bath on the strength of it.

Do you still regard NR savings to be at 'absolutely zero' risk?. If you had a million quid in there, wouldn't you feel at somewhat more zero risk having it elsewhere?

Regards.

Q. Is this Government promise to fully guarantee Northern Rock savings legally binding?

A. No, not yet anyway. Yet the Chancellor, Alastair Darling, has appeared on TV making this guarantee, and other official spokespeople have backed it up. For the Government to not honour this promise, especially after the massive public interest in the story, would frankly be political suicide of the highest magnitude.

So although nothing is set in legal stone yet, my view is that for once, a politician’s word is as a good as his bond; anyone with existing deposits in Northern Rock should have absolutely zero worries about the safety of their cash.