Northern Rock: What should’ve happened last Friday Blog Discussion

Former_MSE_Archna

This is the discussion to link on the back of Martin's 'Northern Rock: What should’ve happened last Friday' blog. Please read the blog first, and then click reply to discuss.

Read Martin's 'Northern Rock: What should’ve happened last Friday' Blog

dronid

The reason, sadly, the public now believe the hype. The press exaggerates a situation and the public believe it. It's weird the way we follow the media's lead on everything. It tells us what's important, what, or who, is untrustworthy, what should be believed and what we should think. We would prefer to trust 'The Sun' to give an unbiased, rational viewpoint rather than political reassurances. Scared yet?

So in response to Martins question, of who else should be on the panel, I would suggest the following.

Katie Pryce/Jordan
Peter Andre
Matt Lucas as Vicky Pollard
David Beckham
Simon Cowell
Graham Norton
Paul O'Grady
And Stephen Fry as 'The Brain'

Now that panel the public would trust.

nihon2

What should have happened last Friday (or even on Thursday the day the laons were given to Northern Rock) is what eventually happened on Monday - or was it Tuesday. i.e. the Bank of England finally guaranteed savers deposits 100%. The fact that initially Darling was not prepared to do this highlighted even further the risks that savers were facing. It's all very well to talk about the guarantees that savers already had, but these only amounted to 100% for the first £3000 or so. Then you were covered 90% up to about £30,000. Who wants to lose 10% of their savings. Above that no cover whatever. It was abundantally clear to me (a Northern Rock saver) that such a guarantee was the only action that would calm savers' fears. It wasn't a matter of worthies giving assurances - whatever the number and emminence.

jakeshaw

Yes I agree with nihon. Deposits should have been backed 100% at the time of the annoucement - to reassure the public it geniunely was a short term liquity crisis and had nothing to do with the medium term solvency of Northern Rock. Infact, believe it or not I sent a pop-shot email saying all this to Alistair Darling on Saturday - to which no reply has been received!

The Government, FSA, Bank of England and indeed Northern Rock all appeared hotch potch in their announcements. Like Martin says, a unified, industry wide approach would have not allowed the media to delve into a multiplicity of headline grabbing agendas - and mislead the public into panic.

Mobeer

Part of the problem was that different media was saying different things. In particular, the amount of protected savings was variously reported as £2000, £31,700 or £35,000.

I think the government should have said simply:
1 - your savings are fully protected up to £2000
2 - savings above this level are not fully protected
3 - there are many banks to choose from

Then if customers want to close accounts or reduce their balance they could do so.