They are finished - breaking news

lypsey

Northern will close there doors , it says "But new accounts opened after 19 September will not be protected. "

You will see people withdrawing savings again because the bank has to fail

http://news.bbc.co.uk/1/hi/business/7004109.stm

What happens when money returned to the Northern after guarantee is different
For example if you transferred 35k and move back 37k , are you not covered for 2k. Its a mess and Mervyn will pay with his job today

Shares down 20% today , now 2.05

Doozergirl

Where does that say they are finished? Your title is misleading if it relates to the article which only explains who's money is being protected by the treasury.

lypsey

Doozergirl , I don't want to appear rude but if they say NEW deposits aren't covered by the Goverment who on earth is going to save with them

also , if you were about to take a new mortgage would you seriously go to Northern Rock??

Come on even the city nows they afre finished , look at their share price

WTF?_2

lypsey wrote: »

Northern will close there doors , it says "But new accounts opened after 19 September will not be protected. "

You will see people withdrawing savings again because the bank has to fail

http://news.bbc.co.uk/1/hi/business/7004109.stm

What happens when money returned to the Northern after guarantee is different
For example if you transferred 35k and move back 37k , are you not covered for 2k. Its a mess and Mervyn will pay with his job today

Shares down 20% today , now 2.05

I don't know if that equates to "They're finished" but it's quite scary to find out more about the BoE/govt 'guarantee'.

It won't cover any new accounts opened (which pretty much torpedoes their chance of getting new savings business) and it seems that there is absolutely no real mechanism for actually implementing the 100% guarantee of safety on deposits if it is ever needed.

The whole affair certainly is a mess. I can only conclude that it's felt that the incredible policy U-turn from the Bank of England on injecting liquidity into the markets and taking mortgage backed securities that the markets won't touch with a bargepole as collateral for emergency loans is going to be enough to keep them going for long enough to be taken over.

Debt_Free_Chick

Doozergirl wrote: »

Where does that say they are finished? Your title is misleading if it relates to the article which only explains who's money is being protected by the treasury.

And even without the Treasury's protection, there is still the guarantee given by the Financial Services Compensation Scheme.

Debt_Free_Chick

lypsey wrote: »

Doozergirl , I don't want to appear rude but if they say NEW deposits aren't covered by the Goverment who on earth is going to save with them

New deposits are covered by the Financial Services Compensation Scheme, as always.

also , if you were about to take a new mortgage would you seriously go to Northern Rock??

Neither the Treasury nor the FSCS covers mortgages as there's nothing to protect.

Come on even the city nows they afre finished , look at their share price

What does the share price have to do with savers, borrowers or NR's ability to make a profit?

pinkkaz

Yes, I agree your title is misleading, I read the title with trepidation as I'm about to complete on a house and don't want any delays. And then I read the article and find more "same old same old". You should work for the tabloids...

CB1979_2

everyone knew that the BoE/govt only guaranteed existing accounts.

where's the new news?

dmg24

I have to admit I clicked on this post because the title implied that Northern Rock had announced it was closing.

Perhaps the title should be edited to 'I think they are finished'? This is purely lypsey's opinion, and I don't think one person's opinion makes 'breaking news'?!!

Generali

It's not possible for the Govt to carry this guarantee indefinitely. NRK pay a high rate of interest on their savings bonds than the govt does on Gilts. If the govt was going to guarantee all new savings with NRK they'd never get another penny lent to them again.

As the govt needs to borrow about £30,000,000,000 (that's about £500 this year for every man, woman and child in the country that we're going to have to repay) they rather need the money to flow to them and not to NRK.

Debt_Free_Chick

!!!!!!? wrote: »

I don't know if that equates to "They're finished" but it's quite scary to find out more about the BoE/govt 'guarantee'.

Some of us thought it didn't amount to much, anyway

It won't cover any new accounts opened (which pretty much torpedoes their chance of getting new savings business)

You don't think the FSCS is sufficient for savings up to the limit of the protection it provides?

and it seems that there is absolutely no real mechanism for actually implementing the 100% guarantee of safety on deposits if it is ever needed.

It would never have been needed. It was a PR stunt to restore confidence in the savings market, in general, and with NR in particular

The whole affair certainly is a mess. I can only conclude that it's felt that the incredible policy U-turn from the Bank of England on injecting liquidity into the markets and taking mortgage backed securities that the markets won't touch with a bargepole as collateral for emergency loans is going to be enough to keep them going for long enough to be taken over.

It seems that no-one is allowed to review a situation, in the light of changing circumstances and then do something different to what was done a couple of weeks ago.

Would it have been acceptable for the BoE to have done nothing?