Northern Rock customers, don't panic!

[empip]

At least until the 'great and good' amongst us have shifted their investments into safer areas !

...Northern Rock's online banking facility has ground to a halt due to a flood of customers logging on to withdraw their money...

 

[JohnD]

Northern rock shareholders, however...

share price past year (pence)
used to be over £12

today
now less than £5

 

[empip]

The great british public ... Some may also be good .

Is it common for a firm to have to turn to the Bank of England in this way?

No. This move is extremely rare, which is what makes it such massive news.
It is thought that the Bank of England last acted as a "lender of last resort" to a bank in the 1970s, and the decision has been made after consultation with the Treasury and the City watchdog, the Financial Services Authority.
On its website, the Bank of England says....

...Financial Crisis Management
14. In exceptional circumstances, there may be a need for an operation which goes beyond the Bank's published framework for operations in the money market. Such a support operation is expected to happen very rarely and would normally only be undertaken in the case of a genuine threat to the stability of the financial system to avoid a serious disturbance in the UK economy. If the Bank or the FSA identified a situation where such a support operation might become necessary, they would immediately inform the other authorities and invoke the co-ordination framework...

 

[JohnD]

with hindsight, we should have seen the risk. It's happened before.

Borrow money on immediate withdrawal terms; lend it out for 25 years.

When a lot of your depositors want their money back, where do you get it from?

 

[poshman]

Does this mean I dont need tp pay my mortgage for the next 8 years

 

[tim west]

I'll lend them a couple of bob to get back on their feet again.....at a hugely inflated interest rate along with the hidden service charges and business surveys they'll have to go through in order to make me happy to lend to them.
The small print:
Oh and the rates tied in to whether I'm short of cash anytime so rates can go up aswell as staying put.

 

[2scoops0406]

I've just bought 2k of shares in them

 

[JohnD]

I've just bought 2k of shares in them

was that you?

14:48 453.13p 450 £2,039 Buy
or
14:48 452.00p 2,000 £9,040 Buy

 

[2scoops0406]

I don't know, use a sharedealing service but a 20 plus percent drop in shares in one day is worth a punt, surely ?

 

[BoxBasher]

I don't know, use a sharedealing service but a 20 plus percent drop in shares in one day is worth a punt, surely ?

I've been thinking the same thing but have only got a tenner spare...

 

[tim west]

I think it's Investors they need at the moment not shareholders

 

[2scoops0406]

I've just bought 2k of shares in them

Steady as she goes, will buy another 2k if this continues, why are the general public such muppets (or will he be eating humble pie in days to come
) Hey ho, it's all a game.

 

[empip]

Muppets or prudent?

...If you have up to £35,000 on deposit then you would, in the event of insolvency, get back all of the first £2,000 in your account and 90% of the next £33,000.

That would be a total of £31,700 per person in compensation, or to look at it another way, a loss of £3,300.

But any money above the £35,000 threshold might be lost altogether...

...Moneyfacts.co.uk point out that savers with deposits in more than one subsidiary of a group of companies are only covered by one maximum allocation of compensation per person from the FSCS. Rachel Thrussell of Moneyfacts explained: "For example, HBOS Group includes Birmingham Midshires and Intelligent Finance, as well as Halifax and Bank of Scotland. Also, RBS Group includes Direct Line and Ulster Bank as well as NatWest and Royal Bank of Scotland."...

 

[Thermo]

eddie what share buying service do you use?

 

[JohnD]

I'm not Eddie but i use Alliance Trust & Savings

Online and very cheap (flat fee of £12.50 for each trade and no annual charge.)
http://www.alliancetrust.co.uk/plan_home.htm