Northern Rock bailed out by Bank of England

gearoid said:
The lack of information is a disgrace. I've been trying all morning. You would have thought they would open their office this weekend under the circumstances. Whether the UK gov. has backed them or not, I won't touch them again. I'll be closing my account there for good once I get onto their incompetent website. Even at the best of times it had dire performance problems. It's just not good enough.
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Once you finally get through to NR directly (which I have - last night & this morning), they do give the canned response that everything is allright. However in addition though I was advised this morning that the web was overloaded due to the number of hits (be aware that web sites are prone to doing that with high hits) & that they were working to have it resolved tonight - it now appears they resolved it quicker than that.

The uncertaintly now relates to pending transactions as the web site is back up and running to the same effect. I would not expect same day transfer requests to all go though on monday - purely due to volume of processing activity required to get though all of it. As opposed to just clicking & making it all happen -the bank will still need to conduct normal processing procedures with regard to preventing fraudulent/security related issues. example - did your bank ever ring you to query/validate an online transaction you conducted? They certainly did it to me - & not just NR either.

ninsaga
 
Marie
I think you are swallowing the company spin. Without the Bank of England's intervention NR would be Bankrupt.All banks borrow short and lend long and pocket the spread. NR used a RISKY way to quickly raise funds. Rather than slowly raising funds from depositors they went to the money markets. Well now they should be paying the price.
The bailout is a humiliation for Mervyn King who just last week lectured other Central Bankers about the risk of "Moral Hazard" when they intervene in the markets
 
TSThomas said:
Barclays apparently received £1.6bn @ 6.75% from the BoE a few weeks back;

http://business.guardian.co.uk/story/0,,2159625,00.html

I don't recall any mass queuing or website problems with Barclays though, funny old world. That's the media for you.
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Good point - to a posting I made earlier - I queried it this morning, only to get a response from Marion that this had been done weeks ago.

I am not sure what made Barclays v's NR different though if they both essentially had to do the same thing - was it openess from NR's perspective, did Barcalys manage the comunications alot more carefully - was it a bad news day at Sky & the BBC resulting in sensationalist journalism?
 
ninsaga said:
Good point - to a posting I made earlier - I queried it this morning, only to get a response from Marion that this had been done weeks ago.

I am not sure what made Barclays v's NR different though if they both essentially had to do the same thing - was it openess from NR's perspective, did Barcalys manage the comunications alot more carefully - was it a bad news day at Sky & the BBC resulting in sensationalist journalism?
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Its different. Barclays borrowed the money because of a missed payment from another bank and didn't have time to square the position. It was only an overnight loan. NR have set up a facility with the BOE because they can't borrow the money they need from elsewhere
 
1. Has anyone received their money yet? ( i.e. the ones that did same day transfer?) 2. If you do the normal transfer and have to wait 3 - 4 days, how does it work and when would funds have left NR? 3. What other financial institutions in Ireland or available online to Irish customers would depend on other financial institutions for its money rather than customers money, if someone knew percentages that would be great. 4. What other financial institutions in Ireland or available online to Irish customers rely solely on customer deposits? Any help would be appreciated.
 
tyoung said:
Marie
I think you are swallowing the company spin. Without the Bank of England's intervention NR would be Bankrupt.All banks borrow short and lend long and pocket the spread. NR used a RISKY way to quickly raise funds. Rather than slowly raising funds from depositors they went to the money markets. Well now they should be paying the price.
The bailout is a humiliation for Mervyn King who just last week lectured other Central Bankers about the risk of "Moral Hazard" when they intervene in the markets
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Thats not true. NR haven't even drawn down on the BOE loan yet. It is just there for when they need it. And this move by the BOE is not the same as the banks that were bailed out in Germany. That was a true bail out. The BOE have basically done what they are there to do and that is it to act as a lender of last resort
 
maura said:
1. Has anyone received their money yet? ( i.e. the ones that did same day transfer?) 2. If you do the normal transfer and have to wait 3 - 4 days, how does it work and when would funds have left NR? 3. What other financial institutions in Ireland or available online to Irish customers would depend on other financial institutions for its money rather than customers money, if someone knew percentages that would be great. 4. What other financial institutions in Ireland or available online to Irish customers rely solely on customer deposits? Any help would be appreciated.
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I also would be interested in the above - particularly question 2 - How does a standard domestic EFT work re clearing? Thanks
 
Hi,

Does anyone know if you can withdraw money or close your account by visiting their office in Harcourt St in person? I did a search back through the thread, but haven't seen anyone report that they did so.

Thanks,
Rory
 
I just received a call from them - it was a follow up from an email I sent them late yesterday evening.

It appears that NR Ireland are actually working through the weekend to get through the backlog.

I was advised that my same day transfer request would not be processed on monday - but will be processed & into my bank on tuesday. This is just down to the sheer vol of work that they have (as I guessed earlier on).

I asked about instances where people have conducted same day transfer requests on Fri - but never happened - again he stated that this is what they were working through on the weekend to have them there for Monday.

He guaranteed my funds will be transferred & appreciated the fact that I was not closing my account. Before we finished up he asked if I had any more questions or concerns. He was quite pleasant about it & provided reassurance throughout.

The Dublin lines are closed still - as I think they are just dialing out on a case by case basis.

Now time to relax somewhat & enjoy whats left of our summer.....
ninsaga
 
Anyone that has read through all these posts will now have a very good idea of what is going on. An excellent information exchange, a site I have not used for a number of years, must look-in more often.

I managed to get on to the site (very slowly) this morning and hopefully have extracted my 35K leaving a small amount behind like others.

Regardless of weather NR is a sound business as the big bankers and the UK government (WMD?) tell us, as a brand and a deposit only bank here in Ireland I think they are finished. They will shut up shop or re-brand.
From a personal investors point of view there is nothing to be gained by sticking with them.
What happens in UK is another matter.
 
Sunny
This is a bailout. Without it NR would be gone: victim of an old fashioned bank run.
Earlier this week Mervyn King wrote a letter to the House of Commons about the risks of Central Bank intervention. See here.
[broken link removed]

This is the conclusion (taken from Calculated Risk).

The path ahead is uncertain. There are strong private incentives to market players to recognise early and transparently their exposures to off-balance sheet entities and to accelerate the re-pricing of asset-backed securities. Policy actions must be supportive of this process. Injections of liquidity in normal money market operations against high quality collateral are unlikely by themselves to bring down the LIBOR spreads that reflect a need for banks collectively to finance the expansion of their balance sheets. To do that, general injections of liquidity against a wider range of collateral would be necessary. But unless they were made available at an appropriate penalty rate, they would encourage in future the very risk-taking that has led us to where we are. All central banks are aware that there are circumstances in which action might be necessary to prevent a major shock to the system as a whole. Balancing these considerations will pose considerable challenges, and in present circumstances judging that balance is something we do almost daily.

The key objectives remain, first, the continuous pursuit of the inflation target to maintain economic stability and, second, ensuring that the financial system continues to function effectively, including the proper pricing of risk. If risk continues to be under-priced, the next period of turmoil will be on an even bigger scale. The current turmoil, which has at its heart the earlier under-pricing of risk, has disturbed the unusual serenity of recent years, but, managed properly, it should not threaten our long-run economic stability.

I suppose the question is were the terms penal enough to discourage risky borrowing behaviour by banks in the future.
 
Maura B said:
Regardless of weather NR is a sound business as the big bankers and the UK government (WMD?) tell us, as a brand and a deposit only bank here in Ireland I think they are finished. They will shut up shop or re-brand.
From a personal investors point of view there is nothing to be gained by sticking with them.
What happens in UK is another matter.
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If NR do shut up shop here, then we're most likely heading back to the derisory returns on deposits that we had to put up with from the likes of AIB and BoI before they entered the market. That's the really unsettling thing about these last few days. Ok, RaboDirect are here now and will offer better rates but the removal of NR as a competitor can't but have a serious effect on things going forward. In the longer term, people are going to find it much harder to protect against/limit inflation eating away at their deposit savings.
 
Hi everyone, sorry for appearing so... not informed but is there a kind of indepentent indicator of health of the banks/savings accounts providers here in Ireland pls? Like a kind of "S&P's" indicator let's say...

Thank you to anyone who could spend 1 minute answering this question... :confused:
 
Maura B said:
Anyone that has read through all these posts will now have a very good idea of what is going on. An excellent information exchange, a site I have not used for a number of years, must look-in more often.

I managed to get on to the site (very slowly) this morning and hopefully have extracted my 35K leaving a small amount behind like others.

Regardless of weather NR is a sound business as the big bankers and the UK government (WMD?) tell us, as a brand and a deposit only bank here in Ireland I think they are finished. They will shut up shop or re-brand.
From a personal investors point of view there is nothing to be gained by sticking with them.
What happens in UK is another matter.
Click to expand...

The only way that NR will recover the confidence of Irish depositers, is by being taken over by a bigger bank with a more diverse asset spread i.e not as dependent on the mortgage markets. We need a strong NR in the market. Does anyone honestly believe that longer established institutions would have offered such recent competitive deposit rates without the presence of NR, Rabo and Halifax? Perhaps, Anglo Irish will fill the vacuum, though they will need to develop their on-line systems.

David McWilliams, more an economic philosopher, was very interesting on the late Late last night.

This askaboutmoney forum is really going to be buzzing over the months ahaed!
 
After 2 days I got a answer from the NR Help Line.
He tells me the on-line is working, I have tried to get On-Line for 2 days
Has anybody got on-Line in the last 2 days??
He also tells me as I am an On-Line customer I cannot get my money any other way
 
BobMax said:
After 2 days I got a answer from the NR Help Line.
He tells me the on-line is working, I have tried to get On-Line for 2 days
Has anybody got on-Line in the last 2 days??
He also tells me as I am an On-Line customer I cannot get my money any other way
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I haven't been able to login to the system since I first tried on Thursday night.

Currently, instead of being put through a login stage which never succeeds, the following text is displayed instead:

Important customer notice
[FONT=Arial, Helvetica, Sans serif]Unfortunately, the system is currently very busy.
We apologise for any inconvenience caused and ask that you try again later.
Thank you for your patience in this matter.
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...which is at least better than having to sit there for a while waiting to see if your login fails, but although the text suggests that the system may actually be servicing other peoples' connections at the moment, I am not convinced.

[/FONT]
 
BobMax said:
After 2 days I got a answer from the NR Help Line.
He tells me the on-line is working, I have tried to get On-Line for 2 days
Has anybody got on-Line in the last 2 days??
He also tells me as I am an On-Line customer I cannot get my money any other way
Click to expand...
Yes I got through a few hours ago (see my earlier post) and was told that my electronic transfer would take place as soon as possible (was given a reference number for the transfer as usual).
 
BobMax said:
After 2 days I got a answer from the NR Help Line.
He tells me the on-line is working, I have tried to get On-Line for 2 days
Has anybody got on-Line in the last 2 days??
He also tells me as I am an On-Line customer I cannot get my money any other way
Click to expand...

I managed to access my account at about 5.30am this morning. Others succeeded as well - see earlier posts. Not sure about the help line but a number of posters here including myself were able to request withdrawal of funds via the 01 numbers posted here.
 
Just logged in there 5 minutes ago and sailed right into my account no problem.
Made a withdrawal for value 17/09/07 to my BOI account.
 
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