Peston pleads innocence...
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Myrmidon_J
Posts: 287 Forumite
See: http://news.bbc.co.uk/1/hi/uk_politics/7870240.stm
BBC Business editor Robert Peston has told MPs he does not believe his reporting led to the collapse of Northern Rock.
I didn't realise that Peston had been hauled before the Treasury select committee... About bloody time, though. The media has acted irresponsibly and it should accept some responsibility for the fear and hysteria that has swept the nation in this recession.
Thoughts?
For the avoidance of doubt: I work for an IFA.
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There is no doubt about it in my opinion: He did break the story on Northern Rock which is fair enough, but it was delivered in a sensationalised way and failed to mention the FSCS guarantees that were in place to protect all the savings of at least most of the small depositors & most of the svaings of the rest.
Irresponsible reprting by him & BBC - reminds me of the continuing tension between Beeb & HM Labour Govt..0 -
... he did break the story on Northern Rock which is fair enough, but it was delivered in a sensationalised way and failed to mention the FSCS guarantees that were in place to protect all the savings of at least most of the small depositors & most of the svaings of the rest.
Agreed.
It was "scary stuff" (and presented as such) - so guess what? People were scared...
I think Peston's role in the collapse of HBOS deserves our attention, too. If the FSA can throw £50K fines around for fairly inane "insider trading", what penalty for precipitating the financial drive-by that was the short-selling of HBOS?
Crooks!For the avoidance of doubt: I work for an IFA.0 -
There is no doubt about it in my opinion: He did break the story on Northern Rock which is fair enough, but it was delivered in a sensationalised way and failed to mention the FSCS guarantees that were in place to protect all the savings of at least most of the small depositors & most of the svaings of the rest.
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but they weren't - it was only £ 2,000 plus 90% up to 35,000 wasn't it ? so any one with more than 2000 was perfectly rational to withdraw their savings0 -
... it was only £ 2,000 plus 90% up to 35,000 wasn't it?
[strike]No. I think you're confusing the rules for savings and investments. (Though I am happy to be corrected, if mistaken.
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My understanding was that before the government increased the limits (and effectively committed themselves to guaranteeing all deposits), 100% of £35,000 per account holder, per institution, was guaranteed.
For investments: 100% of the first £2,000 plus 90% of the remainder, with no upper limit.[/strike]
EDIT: My post was incorrect. See below. Thanks to MSE members for correcting me.
Now, the limit (for savings) is £50,000.
The vast, vast majority of those who withdrew their savings from Northern Rock, would have been 100% covered by the Financial Services Compensation Scheme. Not that Peston chose to emphasise this fact...For the avoidance of doubt: I work for an IFA.0 -
For savings it was 90% up to 35,000 before Northern Rock. In response to Northern rock it was made 100% of 35,000.0
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http://www.fsa.gov.uk/pages/Library/Communication/PR/2007/105.shtml
1 October 2007
previous compensation limit (for deposits) was a maximum of £31,700 (100% of the first £2,000 and 90% of the next £33,000 of depositors' eligible claims).
it was raised to 100% of 35,000 due to NR, and then to 50,0000 -
Myrmidon_J wrote: »The vast, vast majority of those who withdrew their savings from Northern Rock, would have been 100% covered by the Financial Services Compensation Scheme. Not that Peston chose to emphasise this fact...
they weren't and thats why withdrawing anything over 2000 was logical0 -
For savings it was 90% up to 35,000 before Northern Rock. In response to Northern rock it was made 100% of 35,000.
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Previous compensation limit (for deposits) was a maximum of £31,700 (100% of the first £2,000 and 90% of the next £33,000 of depositors' eligible claims).
Apologies; I was mistaken.
Thank you for the correction.
(I'm still not convinced that the panic was entirely logical; I also maintain that the media coverage of the bank run did not exactly help matters. However, I do now see the context for 'panic'.)For the avoidance of doubt: I work for an IFA.0 -
No... I know you are right in the monetary limits at the time and in many cases withdrawals were logical. My point is the majority of NR accounts were small savers; the majorty of the money was bigger accounts - who clearly were right to be worried. But my point is when Peston broke the story he never mentioned the guarantees AT ALL.they weren't and thats why withdrawing anything over 2000 was logical0 -
if I'd had 100,000 in NR and the FSA had only promised to guarantee 31,700, and it looked like NR were going bust, I'd have withdrawn my money - why take the risk ?0
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