backfoot:

I am afraid Daniel speaks critically of those with common sense because he sits in judgment without being in a similar position.Before late last night the Govt.guarantee to NR did not exist,so given the run on the Bank no one in their right mind would have sat back to protect their interests.Daniel has been resident here for a short time and will not again have personally sufferred from previous losses or witnessed them.The Govt.may have clarified the position for NR but in order to regain wider confidence it should change the exisiting FSA compensation rules across the board.Until it does there will be ongoing anxiety.

It doesn't really matter what Daniel thinks.The many actual investors involved who were part of the fabric of NR lost confidence and were not reassured by the pitiful Management until the Govt.partially stepped in.They stepped in precisely because NR was entirely vulnerable to collapse.If not they would have sustained the original line that the BOE temporary lending facility was sufficient.

Plenty of good will come form all this.Hopefully the compensation scheme will be improved.Lenders will lend more responsibly in future bringing about a measured stability to the housing market.A downward correction would be no bad thing in my opinion,to allow genuine first time buyers into the market.Many investors will start to spread their risks wider and more safely.Many will evaluate better options...I have found 0.5% higher for my savings.

Daniel you were quick to call respectable people who form the fabric of this country 'idiots' ,liars and so on and other demeaning comments.Now that someone gives as good as you give you get all shirty and PC. Sorry cobber you ain't got a clue mate.p.s.I don't read the Daily Mail.

 The Daily Mail remark was only one in passing ;) A lot of the reaction was down to the media drumming up a rather un-newsworthy (where's the big fuss over Barclays' 1.6 billion loan?) story to be more than it actually was then the customers took charge and actually made it an issue out of it. Northern Rock haven't even had to draw any money out of this facility yet either so lets consider that.

Just because investors lost confidence doesn't mean there was actually a reason to do so. This to me is a case of chinese whispers. At every single step the "problem" seems to have mutated into something even further from the original truth.

I do agree a downward correction in house prices would be a good thing. I think housing is vastly overvalued in this country. People in Australia complain it's hard to get a house but it's even moreso here.

The BoE stepped in because although Northern Rock was still solvent and they are keen to stress this Northern Rock relied on itself being able to lend money for homeloans to be able to maintain it's revenue stream and when a company can't make profits this affects the share price and then there's a ripple effect through the market and that's a bad thing. The BoE wouldn't have stepped in if Northern Rock was in danger of collapsing. As was stated before they seemed happy enough to see Barings go down but tbh that's a bit before my time.

If respectable people who are the "fabric" of this country cause the collapse of a financial institution for no good reason then they are being stupid and idiotic. Just because someone fought in WW2 or they're just plain old is no reason to let them off for sheep-like behaviour which only causes problems. The BoE, the FSA and the chancellor have all stated that NR is still solvent. What more do you need?