You are here: Home - Saving & Banking - News -

Northern Rock firms up as Government backs savers’ cash

0
Written by:
18/09/2007

Shares in Northern Rock have recovered 11% (11am Tuesday) after the Government promised to protect savers’ deposits.

Chancellor Alistair Darling made this pledge as a result of intense financial and political pressure, providing relief in the banking sector, especially amongst those banks like Alliance & Leicester and Bradford & Bingley considered vulnerable to the credit crunch.

Northern Rock chief executive Adam Applegarth said: “The simple fact is that the Chancellor has made it clear that all existing deposits in Northern Rock are fully backed by the Bank of England and are totally secure during the current instability in the financial markets.

“These have been troubled times, but Northern Rock will prevail.”

 BBC Economics editor Evan Davis said that the cash guarantee was a “dramatic step” and essentially a “money back guarantee”.

The Bank of England has also pumped £4.4bn into the economy in an attempt to free up credit lines.

ED’S COMMENT: Close, but no disaster

DESPITE STATING last week that the Bank of England would not intervene in the affairs of banks that had over-exposed to the money markets, Chancellor Alistair Darling had little option but to guarantee Northern Rock’s savers’ deposits in a last-ditch rescue operation. And have no doubts that what the Chancellor did was exactly that. If Northern Rock had been allowed to go over, the contagion would have spread to other banks and faith in the entire system undermined. The banks should now review their own funding arrangements as a matter of urgency and the senior executives and board members of Northern Rock search their consciences and do the decent thing if that is what the situation requires. I wonder how many will conclude that the decent thing is the honourable thing to do.

Tagged:

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
ED’S NIBS

GARRULOUS ex-Federal Reserve chairman Alan Greenspan has been sounding off again, this time about the UK inflation rate. Al reckons...

Close