..it goes quickly.Here is the daily outflows from Northern Rock bank accounts during the run back in September 2007. When the run started, NRK were losing billions each day.
Although the government had given a blanket guarantee on deposits, the bank kept losing funding. By October 2007, customer deposits had shrunk to 15.3 per cent of the company’s funding (a drop from £30 billion to £17 billion); and wholesale
loans had fallen to 11.8 per cent (from £17 billion to £13 billion).
To cover this loss of funding, the Bank of England was forced to inject tens of billions of pounds. By February 2008, the BoE had over ₤50 billion invested in Northern Rock.
Wouldn't it have been so much better if the FSA had properly supervised it? I know; horse, bolt, barn door.
4 comments:
But wouldn't it have been even better if they had instantly agreed to guarantee sy £500,000 deposits for existing bank customers.
That dreadful inaction and Brown's [now almost forgotten, but he had form} indecision caused a bad situation to get worse.
My main recollection of NR from the TV was all the media types huddling around the Northern Rock branch in Kingston-upon-Thames, interviewing the same queue of pensioners.
Kingston being just a short hop on the district line and a cab ride from Wimbledon away from BBC HQ.
Good shopping too and no hard to understand accents.
"horse, bolt, barn door": only in the US, dear. Hereabouts it's "stable", not "barn".
True, but once they'd made that loan and nationalised it, they were in fact doing the right thing - not making any new loans and encouraging borrowers to remortgage elsewhere - the taxpayer loan was being repaid ahead of schedule - leaving all the crap behind.
That is, until recently.
NB - when a customer withdraws his or her money, that's not actually a loss to the bank, it just forces them to refinance with something else.
Such happy days.
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