This scares me a little
- 17th Sep 2008
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- Dave
Exactly 1 year ago on the 17th September, it’s was a Monday and I still remember that day as if it’s was only yesterday. You see on the 14th Sept was the start of the “run on the bank” and it was said that £1 billion was withdrawn by customers that day, and everyone was waiting to see if the weekend would help the ailing Banks situation, of course It didn’t and later that day after Northern Rock customers had taken another £1 billion, Chancellor of the Exchequer Alistair Darling told the world and more importantly Northern Rock customers that the British Government and the Bank of England would guarantee all deposits.
What scares me is that it’s was Lehman Brothers that had sold the sub prime mortgages to Northern Rock, then Virgin and AIG ( yes the one that the US government has just bailed out ) tried to buy Northern Rock, hmmm but AIG insured and underwrote a lot of Loans and Mortgages.
So Northern Rock saved by the UK Government and AIG saved by the US Government, Lehman Brothers well they didn’t get saved, But Barclays is trying to buy some of Lehman Brothers Assets, but why ?, is Barclays Bank in the bad place at the moment, but then today I see that HBOS has confirmed it is in advanced talks with Lloyds TSB about creating a UK retail banking giant worth £30bn. Is this business expansion or business protection, I mean which UK bank is going to fall, you kinda get the feeling that one has too..
Now the real scary thing is that my business is only protected the same as any bank account in the UK with a guarantee of £35,000 if anything went wrong. I bank in Natwest business & personal, but I have a lot more than that in the accounts. Now I know that Northern Rock is not the best interest rates out there, but hell it’s a nationalised Bank at the moment which would mean savings would be 100% guaranteed, and that means a lot more than the extra 0.5% I can get on interest rates. But then it is the UK Government who runs the bank, and they lose data everyday so what the hell should I do? I kinda feel like just stashing the money under the mattress!
DaveN
Tags: , money
9 Comments | Leave a comment »
For me this whole thing is an excuse to end up nationalising the global banking system. If a few people lose deposits here and there, it is just collateral damage. Very frightening for those on the receiving end, but the way it is going we will see no independent financial institutions left.
Roll on cashless society… :(
You say it like having huge piles of cash under your mattress/in your cupboards/boot of your car is a bad thing?
Nick (in Russia)
P.S. I hear the new 5000 Euro note saves a considerable amount of space.
Send it over here Dave. Canada’s big. I’ll hide it for ya. :)
Plucked from a business forum, only posted today so should be up to date.
a small business is as follows:
< 50 employees
< £6.5 mill turnover
< £3.26 mill in assets
Pass 2 out of three and you qualify for compensation.
However, sole traders (or non-limited companies) beware that the compensation only applies once per legal entity and not per account held - that is, as a sole trader you will already have used up your £35k through your personal account (assuming you operate a separate business account).
First, is seems that limit is per financial institutions, so i would say: open accounts in different institutions.
(source: http://www.moneysavingexpert.com/savings/safe-savings )
Then, open bank accounts in different EU countries. They have different limits, Norway having one of the highest, if not the highest…
(source: http://www.rata.bof.fi/Eng/FIN-FSA_News/FSA_Newsline/2007/6_2007/1.htm )
Dave, I’ve been thinking about the same sort of issue recently. I was only young at the time, but I remember when BCCi went down the tubes and many people lost out. Yes, that was for entirely different circumstances, but it’s the same, ultimate fate.
Perhaps we should all be looking to buy big bloody safes for now, until this whole ordeal blows over.
@James: Cashless society would still be based on having available funds held within a financial institution, who then issue you your card. If that institution goes, you’re in the same boat. Unless of course, by cashless, you mean we should all go back to the day’s of bartering. In which case, Dave, I’ll trade you my 3 cats for some of your link juice ;)
I was with Northern Rock last year when it kicked off. I also had more than the protection limit in the A/c.
I’m still with NR precisely because of the reasons you mentioned: shelter.
But I tell ya what: I was brickin’ it last year!
It’s one thing knowing that joining the crowd only fuels the run on the bank; it’s another when it’s YOUR money in there, and that you could be wiped out.
Even with savings protection you could still be wiped out ‘cos you can bet it’ll prolly take months, if not years to claim it all back… particularly when there are 10’s of thousands of you.
dave, an update for you … I’ve just been filling out the application form for a Business Reserve account at Northern Rock .. and was reading the T’s & C’s while I was on hold … and surprised to see that Northern Rock are part of the Financial Services Compensation Scheme too, so they only guarantee 100% of the first £35,000 .. or each depositor for their combined deposits, so a joint account would secure £70k. Just like all the rest of the banks.
But I was surprised how easy the application form was and you don’t have to send off company accounts, bank statements, driving licenses, and whole life story .. so once I get Daves signature on it it will be in the post an hopefully open next week.
Don’t believe for a second that banks are in it for you. Despite adverts with lush holidays and entertainment, I found an internal letter lying around my local branch which was glowing about how consumers are “finally pulling their heads in” after the climb in costs of petrol, rates, property and “especially consumables” over the past months.