Northern Rock Crumbles...

[att]

..Nice to see that we now have a financial institution that compliments our health service and workforce.....THIRD WORLD.
The last time I heard of this kind of action was in the South Americas country........Escapes me at the mo`, but nice to see the birds come home to roost on the greed of the square mile.
Remember peeps, your money is only safe upto 30K(then you still lose approx 2-3K) in any bank, if you have more in a savings acct. spread your risk.....Spread your risk, times will get interesting in the next 18 months......

[Lord Shagg-Pyle]

All the banks are starting to quack. God bless America! :roll:

[P16LET]

As was pointed out rather eloquently on the radio today, this isn't just Northern Rocks problem. It all started in the US with banks lending money to people who could ill afford to pay it back, and as banks trade globally and not just nationally, they can hardly be held accountable for something that began thousands of miles away.

I think you should perhaps pay a little more heed to the fact that this could have a ripple effect on other financial institutions, and if you perhaps looked at it all a little more closely, you would see the effect on the stock market is already apparent, with 32% dropping off NR's share price today alone....so in the long run a greater proportion of people could be affected one way or another.

Spreading your money around is a sound idea, BUT, just by having some money tied up with NR could prove devastating.

It's a shame you couldn't muster a little more sympathy for those embroiled in all this....primarily those with mortgages. The uncertainty of it all must be very worrying indeed.  

[Lee_D]

It's a shame you couldn't muster a little more sympathy for those embroiled in all this....primarily those with mortgages. The uncertainty of it all must be very worrying indeed.  

My thoughts too. I detest smug "I told you so" Merchants when people who are scraping by a living are probably looking at some very hard times.

Senseless. :x

[agent006]

It's nowhere near as serious as it's made out.  NR are still in good financial shape with plenty of assets, they're just the first to have trouble sourcing cash on the markets.  There's very little chance that they'll go bust, the shareholders will get a raw deal but maybe they should've though about the demutualisation thing a bit more rather than just grabbing the cheque.  NR are ripe for a takeover from one of the big banks at the moment at a bargain price.
Besides, The Bank of England simply will not let a bank go to the wall taking savers' money with it.  If NR don't sirvive this then the BoE will leave NR's shareholders to hang but savers will get back everything they had.

[The Smiths]

My view on this is that if you owe them money then it is not too bad - you can move the debt.

If you have savings then these are at risk.

Hopefully I'm OK - only got debt and no savings :?

[thermidorthelobster]

The way I read this is that this is just a cash flow problem.  Northern Rock have plenty of money (they are more than adequately solvent);  ie their assets are greater than their liabilities.

However, because they can't easily borrow money on the international markets at the moment, they can't raise the CASH they need to keep on doing the normal everyday lending etc they do.

It's like somebody owning their own £500K house, but not having enough cash in their wallet to pay for a round of drinks, so they have to borrow a tenner off a friend.

This is my understanding, anyway.  The trouble is, most of the media don't have a scooby about anything financial, so they don't report it properly, and the ones who do, aren't articulate enough to actually explain it.  Maybe if people actually understood properly what was going on, they wouldn't be so worried about their money, but I can't blame people for getting jittery if nobody can clearly explain the real situation.

I feel sorry for NR actually.  They're an ex-customer of mine and they were one of the nicest customers I ever dealt with.  I'd hate to seem them come a cropper unnecessarily.

[P16LET]

I was a former customer of NR....heavy emphasis on the FORMER.

Over a period of 7 months they stole nearly £750 in bank charges...charging for unauthorized overdrafts, even when the bank account was showing a four figure balance (...in the black I hasten to add)...charging for returned direct debits, again when the account was healthy enough to adequatly cover them...the list is endless.  

....and the reason I didn't pick up on this stealth robbery earlier?...despite inumerable complaints and phonecalls about the lack of statements, they didn't send me one for over 6 months.  :shock:

When I tried to discuss the matter with my branch manager, I was told there was no such thing and no-one would speak to me...Head office was the same, being passed from pillar to post only to find someone hanging up on me.  

The outcome......£750 out of pocket and my business moved elsewhere...(...leaving a £450 overdraft I have never been chased for...oddly enough!)