Removing funds from Barclays

WTF?_2

MrShed wrote: »

First of all abraxas - yes the money WAS in the same position. People who had major difficulty getting money were people who had notice period savings. Therefore, same position.

If people are RATIONAL !!!!!! and abraxas, they would realise that they money is covered up to £31k(or whatever the figure is) anyway. The sensible man would start to put NEW money elsewhere in case of emergencies(ie cash that would be needed quickly), and realise that whether the bank went under or not the money was safe in the long term.

Firstly - everyone who had money in NR had difficulty accessing it when the run was on. The website was down, there were huge queues on the highstreet. Bad news if you wanted to authorise a bill payment or get some money out to buy something.

Now, nominally 31700 of the first 35000 is 'safe' under the terms of the FSCS. Anything above that is potluck, down to whether or not there are enough assets in the bank to cover the creditors (in the case of a bank bankruptcy, the answer is almost certainly 'no').

That's 'safe' in the sense that should the organisation go bust you can fill in dozens of forms and wait months to get it back from the FSA scheme - if there's enough money in the FSA scheme to compensate all the claimants.

From the FSCS website:

http://www.fscs.org.uk/consumer/key_facts/limitations_of_the_scheme/

"But it is still possible to conceive of a default (or a combination of defaults) so big as to be beyond FSCS's ability to pay compensation up to our limits."


Now maybe you think that's protection enough for your bank account, I certainly don't. The money is likely to be tied up for months even if the FSCS has enough funds to cover the payout.

I'll say it again since it's a pretty important point that people need to understand: There is no upside to leaving your money in a bank that's facing, or could likely face, a run.

WTF?_2

MrShed wrote: »

To the best of my knowledge, NR have not to date in fact loaned any money from the BoE.

oooh. apart from the (at least) EIGHTEEN BILLION POUNDS it has borrowed in order to finance it's moneylending business.

http://www.guardian.co.uk/business/2007/nov/02/northernrock.barclaysbusiness

Northern Rock has borrowed only £18bn of the £23bn lent by the Bank of England from its emergency loan fund leading to speculation that other British banks need £5bn of extra funds to cope with the global credit crunch.

It's estimated to reach thirty billion by the end of the year:

http://news.bbc.co.uk/1/hi/business/7073556.stm

Northern Rock and the Bank of England expect that by the end of the year the Rock will have borrowed £30bn from the central bank, the BBC has learned.


:rotfl:

MrShed

Yes there is - convenience, as well as, as I see it, a moral point of view in not heaping NEEDLESS further problems onto an already troubled instituation, and therefore being in part to blame for the financial loss of other customers of the institution.

Other than that you are right, OTHER THAN you have still not shown to my satisfaction that someone prudent(ie spread the risk, and be wary of putting more money into a troubled instituation) has anything to GAIN by taking money out of a bank that could face a run.

poppy10_2

CYBERCIDERSAVER wrote: »

Why don't we all start queuing outsiide Barclays. I have no money with barclays but it would be a cool practical joke!!

could do Barclays on monday

Pru on tuesday...

Halifax on wednesday...


Think of all those smug city types with their 100k job sh$%£^ng themselves!!!

LOL, what a good idea! :money:

free4440273

^Flash Mobbing - but with a purpose: we disperse, with our monies LOL.

Generali

If you're a shareholder you might consider selling your shares but I really wouldn't be too concerned about Barclays ability to stay afloat.

From the balance sheet 31/12/2006:

http://www.investorrelations.barclays.co.uk/INV/A/Content/Files/BB_final.pdf

Total shareholder equity £27,106,000,000

In addition, £4,146,000,000 was paid out to equity holders and 'minority interests'

That makes about £31,250,000,000 that would have been available to cover bad debt and trading losses as of 31/12/2006. The worst market rumour that I've heard is that Barclays are in a £10,000,000,000 hole. They can cover that 3x over without having to resort to reserves etc.

It should also be remembered that Barclays' board have denied these losses in a statement to the London Stock Exchange and it is really very naughty (as in smack bottom and bed with no dinner) to lie to the LSE.

caveatvenditor

Got the money moved. I have to queue for 2 hours but its now winging its way to the halifax.

For all those that may protest I have only one thing to say:

Its MY money not Barclays and I won't put it at risk needlessly - and I lose nothing by moving it.


Simple really.

Generali

caveatvenditor wrote: »

Got the money moved. I have to queue for 2 hours but its now winging its way to the halifax.

For all those that may protest I have only one thing to say:

Its MY money not Barclays and I won't put it at risk needlessly - and I lose nothing by moving it.


Simple really.

Why do you consider HBOS to be safer than Barclays? Have you checked their balance sheet?

Turnbull2000

Generali wrote: »

Why do you consider HBOS to be safer than Barclays? Have you checked their balance sheet?

I remember seeing a table indicating assets, liabilities etc of all the major banks a few weeks back. HBOS were shown to be in a very strong position.

Barclay's are undoubtedly looking quite precarious at the moment and shares have slumped. Job losses could follow.

Alan_M_2

This entire thread and the varying responses highlight why our governments current whim for absolute transparency is at best poor judgement.

The average Joe in the street simply cannot comprehend economics on the scale being discussed openly (in tabloid selling sound bites) in our media.

I take quite an interest in the way economies run and much of it still baffles me, but I understand the basic principals of the money markets and why they exist.

Heaven knows why it's needed to be public knowledge about NR's borrowings. Without that being broadcast it would not have created the spiral of nonsense we're now being faced with. Barclays Bank in trouble? You just have to be kidding me.

A run on any bank is caused by sentiment, the effects of a run (which is an irrational trigger in this day and age) are self perpetuating, in so much as a run started because sentiment was such that people felt uncomfortable about their funds being in a certain financial institution (caused by the media) on an institution that was financially sound, may actually result in the said institution becoming unsound. Ergo, the irrational want to be transparent actually causes the very problem it's trying avoid.

I'm amazed on a daily basis by the snippets of information being broadcast on national media as though most of the country can actually process this information in some meaningful manner. It wouldn't be so bad if the full facts were provided but they simply aren't.

All this whole debacle goes to prove more than anything is that information is the real power, not money.