WildHaggis:

My views - from the start - were that there was no probolem with NR, they were just unlucky. 

The company would(should) have been fine if their MD had come out with a statement like this: "investors, we will only be making 120 million pounds profit this year, not the 200 million you are expecting. As you know, our business depends on borrowed funds, and these are very tricky to find at the moment. We've got some more funds - from the Bank of England -  but they are expensive.  So, we thinh we will not make that extra 80 million pounds this year"

Your faith in them is much greater than the City Investors including other Banks. Someone may take them over but their shares trade down yet a further 25% today at £1.34 !! Down from a high of £12.51 on the 9/2/07.

I suspect it may be more to do with incompetence than luck.....lol.

I would put the funds back where they were, if you are certian that this will get your 3.5k back.  Just check your documentation - the chaps costs are bank transfer costs, not the 3.5 k 'penalty' you were charged, you may not be able to get that back - depends on your documentation.

My views - from the start - were that there was no probolem with NR, they were just unlucky. 

The company would(should) have been fine if their MD had come out with a statement like this: "investors, we will only be making 120 million pounds profit this year, not the 200 million you are expecting. As you know, our business depends on borrowed funds, and these are very tricky to find at the moment. We've got some more funds - from the Bank of England -  but they are expensive.  So, we thinh we will not make that extra 80 million pounds this year"

The Government has stated categorically that they back the funds.

keredewor:

I am an existing NR customer, my reading of both the NR statement on its website and the HM Treasury statement link in the NR statement with regard to funding of NR is that you fall in to the category of "Guarenteed".

However, what I do find disturbing is the caveat "HM Treasury Funding guarentee is in place until market conditions stabilise" and this in my view is a problem because it gives, probably fairly, no time limit of support and therefore to make a judgement to re-invest fairly difficult.

My personal dillema is that I had a bond, in a significanrt amount, that matured on 01/11/07, I have now closed the account and received the funds yesterday less 92 days of interest amounting to a > £3500 loss.

As all existing accounts in the period up to 19th September 2007 are "Guarenteed 100%" and if re-invested back in to the account prior to 5th October 2007 will receive all lost interest and any costs incurred in "CHAPS" transfer I have a DILLEMMA.

1) Do I bite the bullet and take no more risk and lose the £3500.

2) Do I re-invest the amount withdrawn as if nothing happened and let the bond run its course for 26 days (05/10/07 to   01/11/07) and in doing so in my re-investment instructions write to confirm that all funds are to transfer to my external account immediately on the maturity date (By 01/11/07)

I would HATE to lose £3500 when all I did was act to protect my own interests...........what do you all think.

PLEASE.......no sniping comments, constructive help is what I am after here.

 Thank you 

TTT...........ANYONE, time is running out, I have 2 days to make a decision.................!!!  

I am an existing NR customer, my reading of both the NR statement on its website and the HM Treasury statement link in the NR statement with regard to funding of NR is that you fall in to the category of "Guarenteed".

However, what I do find disturbing is the caveat "HM Treasury Funding guarentee is in place until market conditions stabilise" and this in my view is a problem because it gives, probably fairly, no time limit of support and therefore to make a judgement to re-invest fairly difficult.

My personal dillema is that I had a bond, in a significanrt amount, that matured on 01/11/07, I have now closed the account and received the funds yesterday less 92 days of interest amounting to a > £3500 loss.

As all existing accounts in the period up to 19th September 2007 are "Guarenteed 100%" and if re-invested back in to the account prior to 5th October 2007 will receive all lost interest and any costs incurred in "CHAPS" transfer I have a DILLEMMA.

1) Do I bite the bullet and take no more risk and lose the £3500.

2) Do I re-invest the amount withdrawn as if nothing happened and let the bond run its course for 26 days (05/10/07 to   01/11/07) and in doing so in my re-investment instructions write to confirm that all funds are to transfer to my external account immediately on the maturity date (By 01/11/07)

I would HATE to lose £3500 when all I did was act to protect my own interests...........what do you all think.

PLEASE.......no sniping comments, constructive help is what I am after here.

 Thank you 

I had a one year bond mature on 1/9/07 It then became a paid up matured bond @2.15%.

I wrote during the panic to withdraw these funds but on hearing of the Gov guarantee on 17th rang to rescind on Tues17/09/07

I
was assured that if I deposited in a new fund 292 I would be covered as
an existing customer so I agreed to do this over the phone and got the
forms a few days later and posted them yesterday. Now I have read in
todays Telegraph the gaurantee I am not so sure . If the new a/c was
opened before 2359 on19th OK But if later will it be OK if they keep
the same a/c No.--or is it a new a/c any way?? 

It's clarified now

 Her Majesty's Treasury has guaranteed:

• All accounts existing at midnight on Wednesday, 19 September 2007.
• New deposits made into those existing accounts.
• Future interest payments and movement of funds between existing accounts.
• All accounts re-opened by customers who have requested closure between Thursday 13 September and Wednesday 19 September 2007.

As with all other major UK banks, any accounts opened from Thursday 20 September 2007 onwards will be protected in the usual way by the Financial Services Compensation Scheme.

I watched the whole thing,which was fascinating. 'Have a go' politicians versus the professionals and I am amazed at how the pros kept their cool.

I thought Mervyn King did excellently. They had been aware that NR was in trouble going back to early August. During the time up to the emergency funding NR had tried to sell the business and the BOE did nothing to prevent that. A deal could not be brokered and NR sought emergency funding or faced insolvency.BOE agreed to act as lender of last resort and having done so NR were obliged under Regulation to reveal the arrangement.

Depositors started to fear for the Bank and very quickly it became clear that there was a run on the Bank.Mervyn King said that in the circumstances, Retail investors had acted totally logically given the level of guarantee.To stop that run and prevent other banks from being brought into it,the guarantee was beefed up to 100%.

He firmly blamed the excesses of those banks which had undertaken risky strategies and said that the more recent injection of £2bn liquidity yesterday was designed to help out others in a potentially similar positions.He said he had been trying to balance the  'moral hazard' of discouraging these excesses with the overall necessity to preserve the banking system.This latest injection would again be at penal rates.

He said the overall compensation scheme would need to be improved for retail investors.

The Press will show the one moment where the Chairman of the Committee lays into the Deputy because it makes good TV and was entertaining, but in my assessment they survived the grilling very well overall.

It will be fascinating to see Mervyn King appear before the Select committee today. He does appear to be in a tricky position and his explanations will largely determine whether he stays in role for the future.

Meanwhile NR's share price continues to take a hammering with the only likely escape route still being a takeover but only at a very low level take out price.This recognises that the business model under which they have operated has limited scope and value for the future.The existing mortgages may be worth the £2 per share being talked about.

If they do fall to a predator, lets hope at least that the branch infrastructure remains intact ensuring the employment of the many loyal workers who will have not had anything to do with this sorry affair. Mr.Applegarth and his greedy team have a lot to answer for.

I would like to thank Northern Rock for prompting me to find better alternatives for my savings. I have split the amount between two local Building socities who are currently offering excellent one year bonds. In the event,that UK rates might follow the US down ,these should represent pretty good value over that period.

The MS search engine shows some good offers at the moment.

All's well that ends well.

backfoot:

Daniel306:

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?

The WW2 was well before my time but your tone towards those that were and elderly people is really offensive.

Each person took their own decision.I took mine straight away on Friday morning as the news broke and I used the internet.I did not follow any sheep like behaviour.People queued because that was all they could do once they wanted to withdraw.

Daniel you can say what you what you like on the internet with relative impunity. It seems like you have now just turned to troll like comments.Perhaps you have a high degree of jealousy of those people who had worked hard to save for their retirements and were just doing what was right for them at the time.

Your naivety and immaturity speaks volumes.

 Sod it. I give up.

Just for the record the government are lying, the BoE is backing an insolvent company so that tax payers will have to foot the bill, I'm a Tory, I hope people lose their hard earned savings, sheep-like behaviour resulting in the downfall of a respectable company is good and I'm a troll.

I apologise for this backfoot and hope you have a good day.

Daniel306:

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?

The WW2 was well before my time but your tone towards those that were and elderly people is really offensive.

Each person took their own decision.I took mine straight away on Friday morning as the news broke and I used the internet.I did not follow any sheep like behaviour.People queued because that was all they could do once they wanted to withdraw.

Daniel you can say what you what you like on the internet with relative impunity. It seems like you have now just turned to troll like comments.Perhaps you have a high degree of jealousy of those people who had worked hard to save for their retirements and were just doing what was right for them at the time.

Your naivety and immaturity speaks volumes.

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?

backfoot:

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...

100%. Government, banks and savers will all learn lessons from this. And ultimately those savers who rushed to take out their money were the drivers behind what should be eventual improvements in the system.

From what I read over the weekend, NR were going to have at their disposal something like £30bn of credit from the BoE whilst deposits totalled £24bn. So it was always effectively £1 for £1. However whilst the amount and duration of credit weren't clear, people were just right to pick the safest option and go.

On whether the guarantee extends to new money is unclear. At the moment, the intention is to stem the flow of money out. As the 'get your penalty back' extends to the 5th October, there's still plenty of time for this extra clarification once the first announcement has done its job.

New or old is safe IMO but waiting for complete clarification is again the safest and best option when it's your hard earned money.