They are finished - breaking news

gemma.zhang

It's obvious BoE won't cover any new customers opening account after crisis, as it will be unfair to other banks !!!... They help them to get over the difficult time at the moment, in future, they have stand on their own feet.

The title is bit speculating !! . and misleading... .. How on earth will BoE cover future customers' deposite, no bank will do that.. It's all making sense..

WTF?_2

Debt_Free_Chick wrote: »

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



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



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

The problem with the FSA scheme is that it only covers 90% of savings up to 35k and nothing above that. There's also the small issue that getting your compensation in the event that it was need is going to be a bureaucratic nightmare and will take goodness knows how long.

Mind you, at least we have an idea about how the FSA scheme would work as opposed to the "I pulled it out of my behind in a blind panic" '100% guarantee' given by the Chancellor.


A plummeting share price is usually a good indication that 'the City' sees no future in an organisation. That must be worrying since the BoE is has U-turned on it's position about providing unrestricted liquidity so clearly the market doesn't think that free and easy credit is coming back any time soon.

Doozergirl

Forgive me lypsey, but stating the bleeding obvious isn't exactly breaking news then! I was in no doubt that they have lost people's confidence. I doubt the fact that new savers are not protected beyond what is the norm will make much difference to their fate.

I assume it would be pretty hard for the treasury to underwrite every penny of everyone's money, so they can't extend that priviledge solely to Northern Rock customers indefinately. If they did recover it would be seen as quite an advantage. The treasury are offering to prop up their savers in a worse case scenario, not the bank itself. Quite rightly.

Jennifer_Jane

Lypsey - I have to say I'm cross about the title of this posting. The whole Northern Rock fiasco of confidence has impacted on me because it's helped bring down sentiment in all equities. So your subject sounds factual, but is just your opinion. Once again, people should remember that Northern Rock has not even taken up the BoE offer, is still solvent, and will probably be taken over quite cheaply. (And I do feel for Northern Rock employees here as inevitably there are redundancies when there is a takeover).

What people and the markets don't need is your (incorrect) opinion stated as fact.

If this posting sounds harsh, I don't mean it to be, I just want to point out that this kind of thing is what has caused people to lose money (ie in the equity markets globally).

Jen

knowledgeman

They still have savings of 20bn plus, then all the mortgage business

A lot of those who left will come back now as it beats opening new accounts etc

So they should go back to around about the same position

The only reason this happened anyway was the panic merchants in the media

Northern rock will recover and anyone who backed their shares at a low will make a lot of money

HugoSP

I still say that NR is ripe for takeover. Its the most sensible future for that bank.

Vertical integration for the bank to give them several sources of money to lend is by far the best option. This will remove the thorn in its side.

Now to convince another bank.....

full-time-mum

dmg24 wrote: »

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'?!!

Me too - thought I'd missed something.

Alternative title could be "Is this the beginning of the end...?"

Badger_Lady

The bets are on at the moment for either HSBC or Lloyds TSB to buy Northern Rock (and all its investments / credits).

There is extremely little chance of the bank purely "shutting down".

And, as for the guarantee not covering new deposits, the reason is so that it's fair to competitor banks. You won't get the guarantee anywhere else either. The guarantee was purely to quell the short-term panic.

dannyboycey

lypsey wrote: »

Its a mess and Mervyn will pay with his job today

Not going to happen. And nor are NR finished - there will probably be a takeover within the next few days.

NekoZombie

Complete misrepresentation: I hope the OP isn't a seller on ebay :eek: