Northern Rock in money crisis.
13 September 2007, 09:38 PM
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Northern Rock in money crisis.
13 September 2007, 09:47 PM
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The Bank of England can act as a lender of last resort to prop up the banking industry in extreme circumstances. The money they use comes from Treasury reserves, ie our money in one way or another.
13 September 2007, 09:52 PM
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I hope they don't. The very last thing we want is a financial crisis. So many things are all linked to this. Losing confidence in the banking industry is nothing short of an atomic bomb going off in a developed country.
If you don't like them, just hope all the senior management get fired
If you don't like them, just hope all the senior management get fired
13 September 2007, 10:05 PM
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Dont think there's much chance of them going under, especially as the BoE will pretty much always bail them... however I've just pulled all the money out of my instant access account I hold with them, and closed the account anyway
don't the Govt borrow money too? Where do the reserves come from?Trending Topics
13 September 2007, 10:13 PM
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Pete.
Just the sort of thing that could tip the economy over the edge ...
It's as if you're attempting to cause an economy crash ergo a housing one too
TX.
Just the sort of thing that could tip the economy over the edge ...
It's as if you're attempting to cause an economy crash ergo a housing one too
TX.
13 September 2007, 10:45 PM
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But approx £30k is insured/assured, so whats the problem?
13 September 2007, 11:06 PM
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In addition there is also the world bank, and we have borrowed a lot from them. I don't really know how the world bank comes into play, not something I have read into recently.
13 September 2007, 11:08 PM
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You get your house for FREE!!
If I had any money with them I would pull it out straight away .... the Directors have sold their shares and withdrawn their cash on deposit!!
This is it .......... it's all building to the biggest crash we have seen - cashunder the mattress is king!!
If I had any money with them I would pull it out straight away .... the Directors have sold their shares and withdrawn their cash on deposit!!
This is it .......... it's all building to the biggest crash we have seen - cashunder the mattress is king!!
13 September 2007, 11:09 PM
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Chill.
They're only suffering through money drying up due to the panic in the USA.
NR is one of the most successful lenders out there.
They operate on a borrow/lend policy, with little reserve.
They're only suffering through money drying up due to the panic in the USA.
NR is one of the most successful lenders out there.
They operate on a borrow/lend policy, with little reserve.
13 September 2007, 11:10 PM
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Its talk like that which can really make it all go bang. It happened in Argentina. Banks had a wobble, so everyone rushed to pull all their cash out of them. Before anyone could do anything everything collapsed.
Just hold tight, it will all blow over shortly.
Just hold tight, it will all blow over shortly.
13 September 2007, 11:14 PM
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13 September 2007, 11:33 PM
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In Argentina, the managers, Directors and leaders were requesting calm as they quietly emptied their own bank accounts!!
14 September 2007, 12:11 AM
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14 September 2007, 12:19 AM
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FFS - Hands up everyone who understands this - Aha - no-one?
Basically Northern Rock have asked the Bank of England if it is OK to use some of their (NR) reserves to fund new business. Just like Woolwich/Barclays did last month( the new Nick Leeson story). BoE use a system that could be considered the equivalent of an 'underdraft' - If you sat down on the first of the month with your bank manager and he asked you how much money you would hold on deposit for the month. You say 3 grand. With the BoE reserve system, as soon as you stray outside the range (either over or under)from £2970 - £3030 you get penalised. What happened today was the equivalent of NR asking for an extra 20 quid
If you got any other lender imposing the same rules on their borrowers that BoE does, they would get hung drawn and quartered by the FSA
Basically Northern Rock have asked the Bank of England if it is OK to use some of their (NR) reserves to fund new business. Just like Woolwich/Barclays did last month( the new Nick Leeson story). BoE use a system that could be considered the equivalent of an 'underdraft' - If you sat down on the first of the month with your bank manager and he asked you how much money you would hold on deposit for the month. You say 3 grand. With the BoE reserve system, as soon as you stray outside the range (either over or under)from £2970 - £3030 you get penalised. What happened today was the equivalent of NR asking for an extra 20 quid
If you got any other lender imposing the same rules on their borrowers that BoE does, they would get hung drawn and quartered by the FSA
14 September 2007, 12:24 AM
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I think it is 100% of the first 2k and 90% of the next 33k to a maximum of 31.5k compensation.... so either Pete doesn't know the rules or he is reacting to what the journalist in the Daily Mail said he should do
14 September 2007, 12:26 AM
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You get your house for FREE!!
If I had any money with them I would pull it out straight away .... the Directors have sold their shares and withdrawn their cash on deposit!!
This is it .......... it's all building to the biggest crash we have seen - cashunder the mattress is king!!
If I had any money with them I would pull it out straight away .... the Directors have sold their shares and withdrawn their cash on deposit!!
This is it .......... it's all building to the biggest crash we have seen - cashunder the mattress is king!!
Pete,
this is rubbish, as an earlier poster pointed out, the mortgage is moved to another financial org.
14 September 2007, 07:15 AM
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The problem is only 100% of the first 2k, then only 90% of the remaining 33k is insured, so with 35k in you would only get 31.7k back!
That and their interest rates are quite poor! (bar their new 1year fixed rate bond of 6.8% or whatever it is - but others are now offering over 7% so that doesnt look worth risking either!)
That and their interest rates are quite poor! (bar their new 1year fixed rate bond of 6.8% or whatever it is - but others are now offering over 7% so that doesnt look worth risking either!)
26 October 2007, 08:47 AM
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This stuff is really hard to get the head around. As far as I know the BoE hold the reserves of the country. The gov can borrow from this bank, and also from members of the public in the form of gilts.
In addition there is also the world bank, and we have borrowed a lot from them. I don't really know how the world bank comes into play, not something I have read into recently.
In addition there is also the world bank, and we have borrowed a lot from them. I don't really know how the world bank comes into play, not something I have read into recently.
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