Northern Rock

boa-constrictor

kippy wrote:

if I had my money in there.

Thats a big IF Kippy. You obviously don't. Fact is, the majority of people who do have voted with their feet, hence the queues.

kippy

Thats a big IF Kippy. You obviously don't. Fact is, the majority of people who do have voted with their feet, hence the queues.

I have a small sum invested with them and a small sum invested with Rabo.
As I said, I aint too worried.
The majority of people are well within their rights to do what they are doing, it is their money after all. It doesnt however mean that the bank is going to go bust.

brenmc

I took out all my money yesterday after trying for about three hours continuously:

Why?
1. Northern Rock does not have liquidity to cover all their deposits and emergency funding from BOE wont change this.
2. Nobody will buy Northern Rock as BOE will immediately withdraw emergency lending as they cannot be seen to be supporting a commercial takeover.
3. Will anyone lend to Northern Rock - Not a chance
4. Can the BOE support them indefinitely now their business model of borrowing on the interbank markets is finished - NO.
5. Will they go to the wall? Most likely.
6. Will you get your money? First 3000 guaranteed. next 45k 90% guaranteed and after that - you are liable to lose everything else. As with most form of compensation, you will have to wait a considerable amount of time to get this money back.
7. The Financial Regulator in Ireland - rang them friday:
"Whats the stroy with Northern Rock"
- no need to panic
"i cant get in touch with them to withdraw my money"
- calm down sir, no need to panic
"are they regualted by you?"
-no
"have you been in touch with them?"
-no
"why not?"
- cant get through on any of their numbers.

The Marx brothers couldnt have done better.
My advice - panic and get your money out before postal deposit accounts in the uk start to get processed.

europhile

AAM have long since banned most posters who understood what was happening in the financial markets

Why would they ban these posters? Doesn't make any sense to me unless I'm being particularly naive.

They don't allow any talk about the house prices either. Why?

Blackjack

brenmc wrote:

I took out all my money yesterday after trying for about three hours continuously:

Why?
1. Northern Rock does not have liquidity to cover all their deposits and emergency funding from BOE wont change this.
2. Nobody will buy Northern Rock as BOE will immediately withdraw emergency lending as they cannot be seen to be supporting a commercial takeover.
3. Will anyone lend to Northern Rock - Not a chance
4. Can the BOE support them indefinitely now their business model of borrowing on the interbank markets is finished - NO.
5. Will they go to the wall? Most likely.
6. Will you get your money? First 3000 guaranteed. next 45k 90% guaranteed and after that - you are liable to lose everything else. As with most form of compensation, you will have to wait a considerable amount of time to get this money back.
7. The Financial Regulator in Ireland - rang them friday:
"Whats the stroy with Northern Rock"
- no need to panic
"i cant get in touch with them to withdraw my money"
- calm down sir, no need to panic
"are they regualted by you?"
-no
"have you been in touch with them?"
-no
"why not?"
- cant get through on any of their numbers.

The Marx brothers couldnt have done better.
My advice - panic and get your money out before postal deposit accounts in the uk start to get processed.

Why would you ring the IFSRA when Northern Rock are regulated by another Authority, the FSA in the UK?.
You wasted your time there mate. Call the right Regulator next time, you might have more luck. Northern Rock have no responsibility to the IFSRA and don't have to answer there calls if they don't wish to.

brenmc

Blackjack wrote:

Why would you ring the IFSRA when Northern Rock are regulated by another Authority, the FSA in the UK?.
You wasted your time there mate. Call the right Regulator next time, you might have more luck. Northern Rock have no responsibility to the IFSRA and don't have to answer there calls if they don't wish to.

Good to see your eye is on the ball and not some pedantic bull****. my point is that anyone who is listening to Cowen or otherwise in Ireland advising them not to panic, they have no juristiction and have no ability to provide compensation. hence my post about the irish regulator. read the ****ing post moron and obviously you have no savings with NR so **** off and have a life somewhere else

BuffyBot

brenmc, take some time out.

Everyone else - let's keep this on topic. Any posts about askaboutmoney's moderation policies are not really for this thread.

vesp

Its the sheep mentality of people who are panicing and all asking for their money out at once who are causing the problem. I would not worry. Its a much bigger financial institution than many an Irish bank, it is profitable and it will not go bust.

dawgestile

brenmc wrote:

I took out all my money yesterday after trying for about three hours continuously:

hey brenmc,
any chance you could inform me how you logged into your NR account, its a joke, was away for a few days only to return to hear this.

A Random Walk

vesp wrote:

Its a much bigger financial institution than many an Irish bank, it is profitable and it will not go bust.

I don't get the importance of it being big? So was Enron.

If you have more than the deposit protection scheme deposited in NR then you are taking on a risk without being compensated for it. That alone should tell you what course you should take.

Colonel Sanders

dawgestile wrote:

any chance you could inform me how you logged into your NR account, its a joke, was away for a few days only to return to hear this.

when you try log in chances are you'll get the system busy message, as follows:

Important customer notice


Unfortunately, the system is currently very busy.

We apologise for any inconvenience caused and ask that you try again later.

Thank you for your patience in this matter.


Don't retry by closing the pop up and re-opening repeatedly. Refresh the screen by pressing F5. Gets you in a lot quicker.

democrates

Gordon Brown should nationalise NR now, not for good, but while it's going for a song and then sell later, let the taxpayer get a bargain for once and save the day.

silverharp

On their website, it just says the website is busy, have they actually turned off the website or has anyone been able to withdraw from it? am tempted to logon at 3-4 in the morning, if it still doesn't let me logon , I'd be a little miffed

Any use in going to the offices on Harcourt Street? Family member has a good bit with them, sort of like life's savings, and is currently having something like a stroke over the issue. Told her that Harcourt St not a branch and it is unlikely they will hand her back her money, but can anyone confirm this?

Incidentally, papers yesterday suggested contacting the Financial Regulator - waste of a minute of my life that I'll never get back. I see what Blackjack said, the guy who answered the phone in the Irish FR didn't even have the smarts to tell me to contact another one.

BuffyBot

I doubt there would be any point in going to the office there - as said, it's not a branch, so it's unlikely they can do anything.

Apparently you can still get on, and transfer money - but it's going to be SLOW. Find a good connection, stock up on patience and wish the Gods to smile if you are going to try and take it out.

BuffyBot

BuffyBot wrote:

I doubt there would be any point in going to the office there - as said, it's not a branch, so it's unlikely they can do anything.

She's gonna try it anyway tomorrow. She's a pensioner, so she's not taking time off work and she has free travel. No point in regretting not doing it in a few weeks time.

BuffyBot wrote:

Apparently you can still get on, and transfer money - but it's going to be SLOW. Find a good connection, stock up on patience and wish the Gods to smile if you are going to try and take it out.

Wonder would that speed up, say after 5 or 6 this evening. Might hang on after work and see if I can do it for her.

Thanks for all that anyway.

bringitdown

Hmm gonna make like a sheep and follow.

Seemingly I locked myself out of my account as I was (now I realise) entering wrong passcode digits, have tried all helplines but get engaged ... tis a pain I cannot get thru at all ... anyone in the same boat (can't get thru)

TIA

silverharp

bringitdown wrote:

Hmm gonna make like a sheep and follow.

Seemingly I locked myself out of my account as I was (now I realise) entering wrong passcode digits, have tried all helplines but get engaged ... tis a pain I cannot get thru at all ... anyone in the same boat (can't get thru)

TIA

this happened to me a few months back as I hadn't been in the account for a year and forgot the security questions, you have to try get on to their IT helpdesk, as they ask you to print stuff off and send it in to have the security reset, lord knows how long that would take at the moment

BuffyBot

Yup - I'd imagine their helplines will be pretty much swamped for the moment.

Talking to a guy who works for NR earlier, and apparently they're all working overtime for the forseeable future to try and assist people - which I guess is a relatively good thing.

tHE vAGGABOND

I walked by the offices in Harcourt street this morning at about 9.30, on My way to the LUAS..

There was a queue of about 100 people there, average age about 65

The queue was not moving at all, so I really don't know what they were doing? Its an admin center as far as I know..

I just got a txt from a mate who has been trying to ring them all day, to their Irish number, and just got thru and got a answering machine "our office hours are 9 -5" She was not happy at all, so overtime my arse!

I don't see what people are panicing about tbh! One bloke in Scotland was talking on Sky News about the collapse of capitalism in general! People appear to have gone crazy!

MrPinK

The Chancellor of the Exchequer has now said that they are guarenteeing 100% of all amounts.

http://news.bbc.co.uk/1/hi/business/6999615.stm

ArthurDent

MrPinK wrote:

The Chancellor of the Exchequer has now said that they are guarenteeing 100% of all amounts.

http://news.bbc.co.uk/1/hi/business/6999615.stm

just saw this - I'm certainly a happier bunny now than I was earlier on

bringitdown

Wahey!

I love the graphic - everything is much clear now!

redspider

The Northern Rock is an interesting case of our financial markets and services and literally how fragile they are. The world is awash with credit and many people and businesses are highly leveraged. Has the ease with which central banks have been 'printing' money, and lent it out, will that now come back to haunt us with a massive crunch?

One thing to consider. All banks have been allowed to loan out approx 10 times their capital, and indeed more. So if all people/businesses were to withdraw their deposits, there wouldnt be enough money to go around. And if all people/businesses had to pay off their loans, they wouldnt be able to, and the world would effectively come to a financial stop, if such a scenario were played out everywhere. Material assets would rule. That is of course highly unlikely, but it is possible and could happen at some point in humanity's future. At the moment, I think there is too much human population growth and enough people 'coming through' the system to prevent such a calamitous collapse.

Money is a promise, and when it cant be made good on that promise it loses its value. The credit 'bubble' has allowed many people and business to live well beyond their means with a view to paying it back at some point. Its when that point in the future becomes unviable or when the rate of paying it cannot be maintained, that problems occur. It's all very well if it keeps going and people trust it implicitly and people can keep paying back what they owe, when they owe it. In NR case, they arent able to.

> Medium to Longterm it seems a takeover of NR is inevitable as the borrowing at interbank and then lending to private customers business model they have is currently unworkable.

My understanding is that they expanded over the years by using other banks money, more than they would have been able to do with normal BOE lending and mortgaging to customers. Like any boom, it was going well, but as the inter-bank market rates they have been using have risen (due to sub-prime effects spreading from elsewhere, re-packaging of debt instruments, etc) they are running short of cash. (ie: their mortgage payments coming in are not enough to pay off their operational costs and their inter-bank payments, which have risen). The cause is therefore a contagion from financial markets elsewhere, a knock-on effect of increasing inter-bank rates.

Those banks that are more leveraged than others with less capital in reserve than others are hit first. And NR is in that category. But is this a house of cards?

NR owes money to other banks, so if it cant pay off what it owes it will put pressure on other banks etc. And NR is not the only one that is under pressure. The ECB and the BOE and the US FED (maybe the BOJ as well, I didnt spot that) have injected money into the credit markets to prevent similar problems hitting all banks.

Of course the run on the deposits at NR is not helping, as that could remove up to 24 billion and leave the bank even more short of capital. The BOE has stated that they will guarantee the deposits to 100% (although its not yet clear if they will do so for Irish depositors!) so the credit facility to NR will be at least that large and then bigger again to handle the mortgage side of the business.

So, NR is a symptom of a credit system across the world, and an example of how problems can so easily occur and how contagions can propogate. The financial markets rely on confidence and market trust, and depositors to leave their money in so that it can be lent elsewhere, and at a higher rate. That is as old as time immemorial.

But would there be a problem at NR if the BOE credit deal was done in 'secrecy'? Customers would be clueless and wouldnt be withdrawing their money, that's for sure. The lemmings analogy is true, once a queue starts, people panic and its is a diminishing circle.

The question is, which other banks are likely to be next, and will they be affected as badly? For example, Anglo Irish Bank are highly leveraged and this has helped them grow substantially over the years. I have no idea if they are exposed to the increased inter-bank rates, or if they are running lower on cash to meet their commitments, but an institution like that could come under pressure. The bigger any institution's recent growth may be an indicator of their likelihood to have problems of this nature.

The BOE cant bail every bank out if every bank should go to the wall. The Irish Central Bank/IFRSA/ECB cant do likewise in Ireland either.

It remains to be seen whether NR is a tip of the iceberg of many or just a bank that over-extended its business too much, over-trading as it were, and is more a one-off caught on the hop as it were due to the 'quick change' in inter-bank rates. It does indicate poor business practice however as safe banking is as safe as houses, borrowing on market rates at X% and lending to customers as X+%, as simple as shooting fish in a barrel. But in NR's case, it looks as if they didnt match their lending to their supply and are now paying a heavy price.

The bank could survive though, but it will depend a lot on what customers do. If most of the depositors leave, if most of the mortgage holders switch, there is no business to be bought.

Banks are built on trust, but once the tust goes, there is effectively no bank.

Redspider

MrPinK

MrPinK wrote:

The Chancellor of the Exchequer has now said that they are guarenteeing 100% of all amounts.

http://news.bbc.co.uk/1/hi/business/6999615.stm

Is it clear that that applies to Irish customers though?

Think the government is seeking some reassurance on the matter. Dunno if anything confirmed yet.

tHE vAGGABOND

Still a queue of muppets outside Northern Rock beside the bleeding horse this morning

There is a low call '1850 315115' number to get into contact with them - I called it to get some of my money this morning, not in a panic, I just need some as Im going to several rugby world cup games over the next few weeks and I want to lash some on my credit card.

Rang at 10am this morning, got thru first time, speaking to a bird in north of england, and was done and dusted in 5 minutes!

Ignore the internet site, its dead. Call the low call number, above..

Traffic

What do you all plan to do with your money??

If your thinking of opening a rabo direct account send me a private message with your full name and email address and ill send you a voucher for €20.

You will get it when you open your account

tHE vAGGABOND

the bulk of my money is staying in Northern Rock

I *really* dont understand the folks queueing for hours and hours to get all their money out tbh...

Afuera

tHE vAGGABOND wrote:

I *really* dont understand the folks queueing for hours and hours to get all their money out tbh...

Maybe they just don't fancy the prospect of having to go begging the BoE for it later on?

tHE vAGGABOND

tHE vAGGABOND wrote:

I *really* dont understand the folks queueing for hours and hours to get all their money out tbh...

The person I know has her whole life's savings, every cent, over 100k, in an account there.

She is a pensioner, ergo no need to take off work, and free travel.

She's not great with phones or websites. She's tried numbers to no avail anyway.

She would rather be there than sit on her arse and worry about whether she should have done something or not.

While I appreciate the points you make, it shouldn't bother you THAT much that she would choose to go to their office. She's not storming the building, merely asking them for a cheque for everything she worked for.