Northern Rock

[natalie_1982]

Whether we should or shouldn't panic, how are these people able to withdraw such huge amounts of cash? I have my mortgage with NR, but I bank with Halifax, at my local branch the maximum withdrawal is �200, and you have to advise the bank in advance if you wish to withdrw this amount. One couple were on the news yesterday wishing to withdraw �1million! I think the police ended up being called due to a "fracas" with the branch manager. So, anyway, would NR really have that much cash held on site that it can afford to pay all of the customers as they wish or are some being turned away due to lack of funds in the bank, because if they are I haven't heard them whinging about it on the news about "NR refusing to give them their money" or some such.

[natalie_1982]

I meant �2000 not �200!

[Hellyon]

What amazes me is I live in the South of England and I'd never heard of Northern Rock until all this happened!

[Reverandfunk]

Natalie I thought exactly the same thing.

Plus and I'm sure Ethel will know the answer but if you have a few thousand saved it would all be covered by the FSA?

[natalie_1982]

Rev, I have �1.36 in my savings account. Whether or not several thousand would be covered by the FSA has never really been an issue I have had to be concerned aout funnily enough...... :-)

[natalie_1982]

Hellyon I only became aware of them after we started looking into getting a mortgage. Flipping glad we did it when we did - we only moved in 10 weeks ago - phew!

[Miss Zippy]

Surely many of these people are withdrawing their deposits via cheque or by direct credit to another account, not cash? Withdrawing �1m in cash would be mad! Reverendfunk - under the Financial Services Compensation Scheme, up to �31,700 of any one person's deposit with a defaulting bank would be compensated.

[Reverandfunk]

More than me Natalie, more than me, dang that dratted ebay....

[natalie_1982]

Miss Zippy, that would make sense :-) It never ocurred to me though!

Still, I am sure there must be a certain amount of people wanting to withdraw their money in cash. For example, I bank with Halifax, but if for any reason I had to withdraw all my money (ok, so I am at the limit of my overdraft and have less than �1.50 in my savings, but hypothetically speaking), I don't have any other accounts to transfer the money into so would need my money in cash, I can't be alone in this....

[jiggy-gb]

I would imagine these people are actually closing their accounts, not just withdrawing, and therefore are entitled to take every single penny from their accounts in one go. Unless of course they have one of those high interest accounts with a notice period before withdrawals/closures are accepted.

[Reverandfunk]

Why bother going and queuing all day to get yr money out when the majority of people (less than �31700) arent going to lose anything.

Just strikes me as being rather stupid lol

[jiggy-gb]

Indeed Reverand, they're just sheep who have panicked without checking first. But then money does make people behave irrationally i suppose.

[tubeway]

I remember similar happening in 1987? when the stockmarket crashed - everybody just trying to withdraw their bonds/stocks etc and as a result losing much more than they would have done anyway. These people should be using their money to buy shares in NR, as they are artificially low at the moment, and the company is right for a takeover.
Still the sheep will keep on following one another and bleating on about it

[Reverandfunk]

Just spend it all Jiggy like me then nothing to woryy about.

bbbaaaaaaaa

[helpmetoo]

of course this is what happens if you deal with northerners!

theyre too busy to work, whingeing about having no money.

[Booldawg]

So if Northern Rock go bankrupt, everyone will lose money they have in accounts etc? But what about mortgages? IMO you dont really stand to lose as you owe them - I'm not sure how it works.

[tubeway]

They will not go bankrupt - I bet they still declare a big profit for this year.
If you had a mortgage with them and they did go down (although they wont - tanslation for sheep baa baaaa baaa baa baaa) another company will buy the debts from them.

[Miss Zippy]

I'm sure lots of people are withdrawing their deposits in cash as you say natalie. No doubt NR have a daily cash withdrawal limit in common with most banks/ building socs, which they will either stick to (which they're perfectly entitled to if this limit is term of their contract with customers) or, as a gesture of goodwill, they may be letting customers withdraw higher limits in cash. No doubr NR have put special plans in place to make sure that their branches have sufficent cash to make this possible. As a general comment (no offence intended to anyone), I would have thought that most people with significant sums deposited with NR are more likely to be financially sophisticated and will know that there is no reason to panic and jump ship.

[Maggoty]

I brought out an ISA with Northern Rock a few years ago. As with all you clever old things above I don't have that much money invested to worry about. The first 2K is safe and you 100% back and after that, bwteen 2k- �33k you get 90%, after that - tough.

And if they get taken over there is a chance I could get a windfall, so sitting tight!!

[sp1814]

The Bank of England have extended Northern Rock a 'loan facility' which means that even their �24billion in deposits is withdrawn within the next week, they won't go bust.

The BBC economics edition (not the wonderful Evan Davis, but some stand in) said that this situation is extremely unlikely.

I gotta say - it's easy to call the savers sheep, but if I had my life savings in a bank that had to run to the Bank Of England, I wouldn't trust any calming statements, I'd get it out. Why take the risk, even if it's a tiny risk?

[cambus]

The couple trying to withdraw �1,000,000 were poor pensioners, who had to scrimp and save all their lives.
Probably still claiming relief on their council tax bill.