Failing Banks

loneranger

I feel quite scared at the moment because after the failure of Northern Rock ,now I see that Citigroup are having problems, as mine is an online account I am petrified that I will not have access to my account. Don,t get me wrong - I don't have loads of money - I live from month to month and could not manage without access to my account. It worries me that we are being held to ransom by the banks (eg salary has to be paid into an account) but if they fall we are stuck. Am I just worrying over nothing or should I start keeping my cash under the matress and working for cash in hand?:eek:

ManAtHome

I think the biggest danger (as proven by NR) is that online access would be restricted if there was a mass 'dash for cash' which would prevent you paying bills. Money you have on deposit would be covered by the deposit protection scheme (up to £35k now I believe), but wouldn't be instantly available.

The main problem for Citi (and several others) is that bonuses are unlikely to be as MegaBucks as last year - the Fed would would do their 'lender of last resort' if Citi had cashflow problems as the BoE has done for NR.

Mark7799

Northern Rock hasn't actually failed though???

loneranger

Mark7799 wrote: »

Northern Rock hasn't actually failed though???

So they say, but I still think that virgin is going in with a rescue plan and I have read that government guarantees may not be as good as promised. I don't have mega bucks in the bank, It just worries me that I will be unable to access my cash.

ManAtHome

loneranger wrote: »

I have read that government guarantees may not be as good as promised.

I've seen a few pieces warning about the limits if you have several accounts with the same banking group (eg HBOS, Halifax, Birmingham Midshires, Saga etc), but nothing about relatively small sums with a single bank.

Supposed to be easy to change current accounts these days - check out this bit on the main site http://www.moneysavingexpert.com/banking/compare-best-bank-accounts

loneranger

Easy to switch banks - yes - but is there such a thing as a safe bank any more?

gt94sss2

loneranger wrote: »

Am I just worrying over nothing

Yes.

The problems that Citibank and others face, is nothing like those of Northern Rock..

However, if you are worried, open a 2nd account and keep some money in there.

Regards
Sunil

exel1966

If you really are that worried about banks failing, I wouldn't bother to leave the house If I were you as you'll probably get run over by a bus and a car and a lorry all simultaneously !!

Reality check ! The above has got far more chance of occurring than these mainline banks failing !

ormus

http://news.bbc.co.uk/1/hi/business/7079520.stm

interview with mervyn king, governor of BOE. tonite at 8pm radio 4. dont miss it!