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

Northern Rock rescue highlights rifts in Establishment

0
Written by:
19/09/2007

Sectors of the financial Establishment – the Financial Services Authority (FSA) and the Bank of England (BoE) – have been confronting each other over the last-ditch rescue of Northern Rock, the Financial Times has reported.

According to the paper, FSA officials had made the BoE aware of the necessity of providing Northern Rock with an emergency loan weeks before the crisis became headline news, as they saw it was over-exposed to squeezed credit markets.

The BoE had initially refused to bail out Northern Rock after it ran out of affordable short-term money on the money markets to fund its own lending in the mortgage market, reasoning that it would “send out the wrong signals”

But the FSA and others have said that more should have been done to engineer a sale of Northern Rock once it was apparent it was in trouble.

Ex-Tory Chancellor Ken Clarke told the BBC: “I did not expect to see the Government ever having to reassure worried savers with money guaranteed by the taxpayer.

“The response should have been clearer and quicker.”

ED’S COMMENT

Of course the complexities of the currency markets are important in this story and the high-level organisations squaring up to each other in the City will inflict some pretty potent blows on each other. But the truly powerful images – and the ones that probably persuaded Alistair Darling to rescue Northern Rock – were of anxious savers, many of them pensioners, queuing in various high streets to withdraw what in many cases were life savings. If any of these middle class, middle-Englanders had been deprived (some would argue ‘swindled’ is too strong a word) of their nest eggs then the ordure would have hit the political fan in a very big way indeed and Darling would doubtless have walked. Thus it is that the little people brought the big people to heel and who cares who gets hurt in the fight over who the latter feel is to blame?

Related Posts

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:
Hands-free car phone sets are ‘as bad as drinking’

Up to eight million UK drivers could be taking risks equivalent to drink-driving by using hands-free mobiles, according to insurer yesinsurance.co.uk.

Close