One of the biggest UK mortgage lenders in deep trouble

I'm surprised the authorities don't step in to stop withdrawals.
 
Well unlike Barclays they are a specialist mortages lender and currently nobody in the money market wants to loan them the money to continue operating due to the US sub-prime mortage fiasco hence the using of the lender of last resort i.e Bank Of England.
 
theStudent said:
makes no sense....
Barclays also borrowed emergency funds TWICE!! and no1 blinks..
http://business.guardian.co.uk/story/0,,2159625,00.html

U would think Barclays is in the same boat if not worse than Northern Rock...
Click to expand...

Barclays has a much bigger savings base relative to their loans which puts them in a much healthier position, Northern Rock's much more dependent on the money markets which is a problem now that supply is drying up in the wake of the US sub-prime crisis. They also have much riskier loans than Barclays has.
 
noxibox said:
Shame you're so proud of your ignorance.

It's a first world country therefore the government's failure to prevent a run on a bank is very surprising.
Click to expand...

I think they gave them emergency credit as an alternative, allowing them to fund the withdrawals as they need to.
 
noxibox said:
Shame you're so proud of your ignorance.

It's a first world country therefore the government's failure to prevent a run on a bank is very surprising.
Click to expand...

Shame, you are so proud of your Arrogance...

Its actually quite scary how much power/control you want to put into the hands of the government/authorities.

If it was your money, you would want to get it out if you thought the company was sinking and you would lose all your cash.

You say you would have preffered it if the government had stopped you drawing your life savings out?
Whats the bet if they had done that, the tune you would be singing would be a VERY different one...? No?
 
theStudent said:
makes no sense....
Barclays also borrowed emergency funds TWICE!! and no1 blinks..
http://business.guardian.co.uk/story/0,,2159625,00.html

U would think Barclays is in the same boat if not worse than Northern Rock...
Click to expand...

Yeah but Barclays was a technical glitch and with these guys they actually didn't have the cash....

However once a run starts on the bank you have severe problems. I half the FNB clients withdrew all their cash tomorrow the bank would not have enough cash to be able to do this and would most probably go bankrupt...
 
NORTHERN ROCK, the mortgage bank rescued by the Bank of England last week, could see as much as £12 billion - nearly half of its deposits - withdrawn by worried savers, experts say.

The run on the bank continued yesterday as police were called in to keep the peace when angry and desperate customers besieged branches across the country despite assurances from the Treasury and Bank of England that their savings were secure.

Branches due to close at midday opened until 2pm, but many hundreds of people were still trying to get their money when the branches closed and minor scuffles and arguments broke out.

Senior executives at Northern Rock spent yesterday at its New-castle head office monitoring events, but the lender is seen to have little future as an independent entity. It held talks about a possible takeover by Lloyds TSB before the crisis and is expected to be sold off cheaply to a rival.

http://business.timesonline.co.uk/t...ectors/banking_and_finance/article2461206.ece

It sure sounds like Africa to me :).
 
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