Northern Rock bailed out by Bank of England

Yorky said:
Has anyone just left their money where it is, having faith that their deposits are safe and the Bank of England is there as a back-up if all else fails?
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Ciao Yorky, although I already left 1K Euro 2 weeks ago I then showed white flag and decided to close. There are other savings accounts with same rate and more reliable news about the bank holding them in my opinion...:confused:
 
I just logged into my nr account a minute ago using internet explorer and it shows "electronic payment sent to your bank" it also shows "gross interest" and "tax deducted" and it has included the interest in the transfer to my bank. This puts my mind at ease. I did the transfer at 6:30am on Friday morning with a normal 3 - 4 day transfer.
 
One small insignificant matter struck me yesterday after I completed my same day transfer. I left 1k Euro in my account. Presumably the 25 Euro charge will be deducted so it will leave 975 euro as a balance. This will get only .10 per cent interest as against 4.50 per cent on 1k.

I have now transferred 25 euro from my current account into NR . Am I the only person in the entire world to have lodged money into NR since the crisis began? The BOE is in good company. Between us we will help keep NR afloat!!
 
I have over 80k in NR and I'm not interested in withdrawing yet.

When the fuss has died down a bit I will take some out and spread my money around.

I dont want to waste my time logging on now - sounds like a nightmare.

The way i see it, with all this furious activity on accounts, it is more likely banking errors will happen now.

Maybe I am young and naive - but I am surprised by the lack of trust shown.

Why dont people just keep their money under the mattress then ?
 
Question 1
My account is locked (don't ask!) and so I've been trying in vain to get through to the phone numbers since Friday. Could anybody who has successfully got through by phone let me know which number worked for them?
Lines supposedly open today, Sunday 10am till 3pm
Thanks
01 6020324 (answers to 'leave a message' which I did)
01 4805060 (constantly engaged)
1850 315 115 (official helpline - answers to 'ring back during office hours'!)

Question 2
Is it possible to go to Dublin and withdraw money in person from their office? Has anybody done this? If so, what ID is required to do so.
 
Tubbs said:
Maybe I am young and naive - but I am surprised by the lack of trust shown.
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The chances are you'll turn out to be right and they'll keep funding the withdrawals all the way down to €0 if it gets that far.

But the assurances from the BoE, British Government and our own Minister Cowen have left wriggle room for them to fail to guarantee all customers deposits. When people leave wriggle room in their statements it's worth being suspicious.

What if one of the possibilities - a takeover or receivership - leaves it hard to get at your money even though you might get it eventually. That said I've left €2k in NR and am waiting for the rest to arrive in my current accounts.

If you've got all your savings in NR then normal risk diversification advice would say spread it around.
 
Tubbs said:
I have over 80k in NR and I'm not interested in withdrawing yet.

When the fuss has died down a bit I will take some out and spread my money around.

I dont want to waste my time logging on now - sounds like a nightmare.
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I agree that it has not been easy to access accounts etc but I am happy that I persevered. The question I asked myself was: " if I had 100k now, would I lodge it in NR". The answer was a resounding "NO!". It therefore didn't make sense for me leave it there either.

I can understand your reluctance to move your 80k and all this fuss could blow over. But I doubt it very much.
 
I got through on the 480 number on Friday. They are probably not answering today (Sun), so keep trying on Monday it's a matter of catching the phone lines between calls.
 
ninsaga said:
Well according to what I have been told there wil be a delay - not sure of the benefit of going back in to do it. I find that even on normal occassions online banking over the weekend gets screwed up in terms of dates anyway.. especially with BOI. I have often conducted transactions on a friday evening after normal banking hours as an example. The money shows that it leaves my account straight away. Then sometimes on the monday, it shows that the transaction date is actually the monday.



Correct - even though I did not ask - they told me that for transactions requested to go same day-which end up not going same day-would not be subject to the €25 charge.
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Update:
The Same Day Transfer requested for Friday 14th has shown up this morning -Sunday 16. The problem is I have a Pending Transaction for Monday as I thought this had failed.I suppose that they will recognise this as a duplication as the amount is no longer available for transfer.
This means that there can be a situation where the transfer is happening in the background (not on a Same Day basis) and there is no Pending transaction record.
 
Centsworth, it might be worth emailing them, some contributers have received phone calls from NR after they emailed them. Like yourself I was wondering if the Dublin branch will deal with online customers and if they do would I be any further on than where I am now. I at last managed to get transaction pending. I'd try emailing them to get their advice. Personally I'd be tempted to go to the bank as it's going to be a couple of days before you get your new password (that's a normal wait!!!).
 
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/09/16/cncredit116.xml

Adam Applegarth, the chief executive of Northern Rock, has made a direct appeal for a white knight takeover bid, amid mounting speculation that the struggling bank is preparing to break itself up.

In an interview with The Sunday Telegraph, Applegarth admitted that it would be a "long slog" for the company to continue on its own. He also acknowledged that the company's business model was no longer viable, due to the bank's over-reliance on wholesale funding...
 
TSThomas said:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/09/16/cncredit116.xml

Adam Applegarth, the chief executive of Northern Rock, has made a direct appeal for a white knight takeover bid, amid mounting speculation that the struggling bank is preparing to break itself up.
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I'd say he has 2 chances. And I'd say that Darling and Brown are ruining good suits at a fair rate.

Based on the information in the public domain it looks as though Northern Rock (as an independent entity) is in imminent danger of collapse. The bank has 24 billion british pounds in deposits from savers. It is reported by the Times that 1 billion british pounds was withdrawn on Friday and .5 billion british pounds on Saturday. It is likely that these figures would be a lot higher had there not been such difficulties accessing both the physical branch network and the online service. The Times Online http://business.timesonline.co.uk/t...ectors/banking_and_finance/article2461206.ece is currently estimating that 12 billion british pounds will be withdrawn (why they anticipate the remaining 12 billion british pounds would be left on deposit isn't clear). Northern Rock, already experiencing liquidity difficulties, will find it impossible to raise the remainder of this 12 billion british pounds on the open market, and will therefore be forced to call on the Bank of England facility at the penal (allegedly 7%) rate. This will almost immediately force the bank into a loss making position.

It is difficult to see any of the other banks taking over the company in these circumstances. None of them will have anything like 110 billion british pounds floating around on their balance sheets necessary to facilitate operating the mortgage book. Nor will they want to be tainted. It would appear that the most likely route will be an administration by the Bank of England, followed by a gradual distribution of the book. This will leave the British Financial Regulatory system with a lot of egg on its face, and in particular the FSA.

At a personal level, I can only thank ionapaul and other for raising this on askaboutmoney.com http://www.askaboutmoney.com/showthread.php?t=61592 last month and prompting me to close my account in good time. Looking back at that thread, I'd say there are a few people eating their words right now.
 
To save me the hassle of ploughing through this thread, can anybody tell me if one can actually go into the Northern Rock offices and withdraw money? No joy whatsoever with the website.

I'm starting to get seriously worried.
 
In my opinion, there are only two things which will stabilise the Northern Rock situation (in the minds of the depositors, that is - I actually think the money in there is as safe as anywhere) :

(1) The BoE agrees to guarantee deposits for amounts above the existing limits (either unlimited or a very high limit). I think this is very very unlikely.

(2) They are taken over by another bank or institution - one which people will trust.

In the absence of either of these, I can't see them building enough confidence to attract more deposits in the short to medium term.
 
I spent three hours yesterday online trying to login to account and eventually got in and transferred all my money out.

Why?

1. Northern Rock does not have liquidity to cover a run on their deposits.
2. Nobody wants to buy it as the BOE will withdraw emergency funding if a takeover is about to happen which is why it was been hawked to all possible buyers before it had to go to BOE for funds.
3. Who wants to be the one who doesnt panic and loses everything - no rewards in this life for being rational.
4. Would I open an account with them now and deposit money? not on your life so why would i leave money there.
5. In my opinion, with 2billion withdrawn already and postal account withdrawals due to arrive in post this week, they will probably face withdrawals of up to 12billion by the end of the week.
6. Northern Rock survived due to it borrowing on the inter bank markets - this is now not an option so their whole business model has been removed - in other to survive, they now cannot lend and have to hold onto their deposits - unlikely to say the least
6. a bank without cash is a bankruptcy.

If you are afraid to panic, my advice is you will lose your money. panic and panic fast. keep hitting the site onlone until you get in even its at four in the morning. the irish regulator is advising people not to panic and yet they too cannot get in touch and also say that the bank is governed by the UK regulator, i.e. in ireland, you are the creek without a paddle and as for Cowen coming out and advising people not to panic, you only have to listen to Aherns testimony to understand how they run their own financial affairs.

the bbc have probably the best articles at the moment that lay out in detail their assets and their liabilities

[broken link removed]

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2007/09/rock_the_numbers.html
 
If people don't withdraw their money, their money is safe. The only threat of insolvency is caused by depositers themselves.

Would I be right in thinking, therefore, that if NR does not open its doors on Monday and is insolvent because of the deposit run, will cheques and online electronic transactions still 'pending', not be honoured?
 
must say I've thought about this myself. Also the fact that someone above mentioned that transactions are insured up to 50k (I think) would the conspiracy theorists say it could be within their interests to default?
 
I got through on saturday but in a stupid move didn't go for the same day withdrawal but the normal option. I think I better login again and correct it if I can.
 
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