Northern Rock withdrawals at £2bn

Northern Rock withdrawals at £2bn

news.bbc.co.uk

Savers have withdrawn almost £2bn from the Northern Rock since Friday, the BBC's business editor Robert Peston has learned.

And the beleaguered firm is bracing itself for more to be withdrawn in the coming days.

It is also understood that the firm was close to being sold to one of two UK banks before it sought emergency funding from the Bank of England.

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Does this remind anyone else of the crash of 1929?
The issue here is not one of money, but of confidence - but a lack of confidence means that customers are queueing for hours to withdraw money that's perfectly safe.
In one reported case, police were called when a couple tried to withdraw their savings of £1 million, and became abusive when they couldn't (allegedly).

This really is a crisis of confidence - and confidence is what the money market is all about.


news.bbc.co.uk
(visit the link for the full news article)

You might wanna read this;

www.abovetopsecret.com...

I've just highlighted in the main thread, about Northern Rock, the stock market crash of 1973-74.

It was the last time the Bank of England had to bail out a lender.

reply to post by infinite


There are certainly similarities, although they may be viewed as cosmetic.
For instance, the dollar hasn't been devalued, but it has dropped against the euro in recent weeks.
I view this as more of an anomaly, caused by a crisis of confidence in one bank - although if it spreads, it could cause real problems.
Another factor we've seen over recent weeks, is the concern over consumer debt, and if debt spirals out of control, we could see a return to the days when there was very little hard currency in circulation - although it's hard to see how western governments could allow this, given what we know now compared to a few years ago about the behaviour and dynamics of currencies and the money markets.
The next week or two might be a time to buy up some northern rock shares, as long as the crisis they face doesn't get out of control.