Northern Rock bailed out by Bank of England

I can't see why it shouldn't. Every other announcement or guarantee has turned out to cover Irish depositors as well despite initial doubts. At the moment the Irish NR site is displaying the same message as the UK one. I imagine it will be modified in the days ahead to explicitly state that this applies to Irish deposits as well.
 
Doesn't this new guarantee by BoE mean that your savings are safer with NR than anywhere else then?
 
Just heard it described as the safest bank in the UK on CH4 News there a few minutes ago. It's not just the guarantee but the simple fact that no one in the UK government, the Bank of England or the FSA wants to hear any more bad news about Northern Rock. It will get as much support as it requires and the terms of the funding will be amended if necessary. That's what happened today with the Bank of England widening the range of collateral it will accept for the funding. This change was made to allow NR to pledge the very best of its assets to Citigroup to avail of the funding on offer from them.
 
I was really impressed that the letter requesting customers to return was signed "Adam". It was obviously too much effort to sign his surname & let us know what his title was.
In my hurry to get money out I've now overdrawn on my demand online a/c. I didn't know I could overdraw, so now owe the muppets money.
 
The one thing you could be certain would happen because of the mad rush to get money out was that mistakes would be made. It shouldn't really come as a surprise to anyone. Although, of course, if you're on the receiving end of one of those mistakes that probably won't be of much comfort.

EDIT: Just thinking about your post again and I can't for the life of me figure out how you could be overdrawn. Have you received funds twice? In that case, you've nothing to worry about. Just contact them and arrange to transfer it back.
 
lukegriffen said:
I was really impressed that the letter requesting customers to return was signed "Adam". It was obviously too much effort to sign his surname & let us know what his title was.
In my hurry to get money out I've now overdrawn on my demand online a/c. I didn't know I could overdraw, so now owe the muppets money.
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His full name is directly under the 'Adam'. He's the CEO of NR.
 
I needed to make an on-line withdrawal on Friday last and presumed that I would be lucky to have the funds in my aib bank a/c in a week or so ... low and behold it is in it this morning (wed)... things must be back to normal thank god
 
mantis1234 said:
Doesn't this new guarantee by BoE mean that your savings are safer with NR than anywhere else then?
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Yes for the moment, but I think this will only apply until next February, when support from the BoE is supposed to be pulled. They can't prop the bank up forever and it still has problems with it's current business model, so I wouldn't be too quick to rush back to them personally.
 
Afuera said:
Yes for the moment, but I think this will only apply until next February, when support from the BoE is supposed to be pulled. They can't prop the bank up forever and it still has problems with it's current business model, so I wouldn't be too quick to rush back to them personally.
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You make it sound like come the 1st of February, the Bank of England will suddenly cut support regardless of the circumstances at the time. It's not about some arbitrary deadline and then the bank is just left to fend for itself. The UK authorities have travelled too far down the road of supporting the bank to turn back now. If there ever was a question mark over NR's security then it existed in the weeks leading up to the Bank of England's decision to provide liquidity. However, even here it would have been most unusual for them to do anything other than act as lender of last resort in these circumstances as this is one of the main functions of any central bank. Still, for someone aware that something was wrong but unsure as to the precise nature and extent of the problem, the prudent thing to do during these weeks would be to withdraw their savings. However, by the time we all (or most of us) found out about this issue, things had moved on. The problem was confirmed to be a liquidity issue and not a solvency one. Of course, you could choose not to believe the Bank of England, thinking they were lying, but then why stop there? Perhaps the whole thing's a lie and sterling is really just worthless paper underpinned by nothing but a mountain of lies, and the euro? and everything else? In that case a stash of gold in the attic is probably the only thing you'd feel comfortable with.
 
Nemesis said:
You make it sound like come the 1st of February, the Bank of England will suddenly cut support regardless of the circumstances at the time. It's not about some arbitrary deadline and then the bank is just left to fend for itself. The UK authorities have travelled too far down the road of supporting the bank to turn back now.
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You seem to be suggesting that the BoE will provide support to NR indefinately... I'm sure the EU and competitor banks will just love that :rolleyes:
 
Afuera said:
You seem to be suggesting that the BoE will provide support to NR indefinately... I'm sure the EU and competitor banks will just love that :rolleyes:
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Well the competitor banks won't complain. They might need the same help yet! Don't see why the EU will have a problem as well. All the BOE has done is lent money at a penal rate which is their job. The BOE will provide support for as long as is needed but are obviously keen to step back hence the fact that they are working with Citigroup to step in and provide the credit line.
 
Afuera said:
They are providing state aid that gives a competitive advantage to one particular company.
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What state aid?? They lent money to Northern Rock at above market rates. They didn't just hand over £10bn and say see you later chaps.
 
Sunny said:
What state aid?? They lent money to Northern Rock at above market rates. They didn't just hand over £10bn and say see you later chaps.
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At the moment they are underwriting all current and future deposits in the bank and they have also agreed to take lower quality collatoral from NR. This is state aid; plain and simple. It can not continue to do this indefinately.
 
Afuera said:
At the moment they are underwriting all current and future deposits in the bank and they have also agreed to take lower quality collatoral from NR. This is state aid; plain and simple. It can not continue to do this indefinately.
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Of course it they can't do it indefinately but what you descibe is not state aid. It is how the banking system works. All Central Banks would probably do the same. The two German banks that were bailed out earlier this year got state aid because they were insolvent until the German State stepped in and gave them capital, not just liquidity and the EU didn't get involved.
 
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