[stu]

Looks like the sub-prime crisis is starting to affect the UK side of things.

http://news.bbc.co.uk/1/hi/business/6994328.stm

Look how spooked the customers are.

[Grifter]

Well if everyone withdraws their money wont that mean they do actually collapse?

The bbc has got a "Have your say" section about this.

Here's one response

$this->bbcode_second_pass_quote('', 'A')s a pensioner with an internet only tracker account I am appalled that I can not withdraw my savings from Northern Rock. The internet was not working last night or this morning. The helpline is completely blocked even with constant redial. I have visited my Leeds branch and after waiting in a long line was refused access to my account (on advice from Head Office said the manager). I am at a loss to know what to do next to withdraw funds. Any ideas?

[sjn]

$this->bbcode_second_pass_quote('stu', 'L')ooks like the sub-prime crisis is starting to affect the UK side of things.

http://news.bbc.co.uk/1/hi/business/6994328.stm

Look how spooked the customers are.

[jasonraymondson]

True True.

The money isn't yours, but they will make for damn certain that you own that debt

[MD]

$this->bbcode_second_pass_quote('jasonraymondson', 'T')rue True.

The money isn't yours, but they will make for damn certain that you own that debt

[frankthetank]

Won't happen in America. People here don't have money (just debt)!

[vision-master]

That is money.

[align=center]You haul Sixteen Tons, whadaya get?
Another older and deeper in debt
Saint Peter don't you call me cause I can't go
I owe my soul to the company store
[/align]

[Plantagenet]

The Bank of England has just agreed to provide liquidity to Northern Rock.

[Tyler_JC]

The federal reserve is perfectly capable of printing more paper in order to back up the electronic money.

Fractional reserve banking is a problem when the public demands gold because the bank only has 1/10 of the physical gold it needs.

But with regards to paper money, it is a rather simple process to create more of it without causing hyperinflation or chaos.

Just delete some 1s and 0s and create some dollar bills.

If the creation of paper money is balanced out by the destruction of electronic money, I don't see what the problem is.

(am I missing something here?)

[Twilight]

This comes as absolutely no surprise to me, but it clearly has to the bank's customers. Who really are quite screwed. ANY bank can be killed by a run, and a significant event next week may show today to have been a prelude.

The problem they have is the savings part is regional (mostly NE England, little changed from its building society days), while its mortgage business is national (a bubble they blew just in the last few years). Now, you kinda have to wonder about a bank that grows from a regional presence to a 19% market share of new lending that quickly. They proudly boasted a large proportion of it was subprime. Frankly, you probably needed to close your eyes and loan at 5x income to clock up that kind of growth anyway.

$this->bbcode_second_pass_quote('BBC', 'U')nlike most banks, which get their money from customers making deposits into savings accounts, Northern Rock is built around its mortgage business.

It raises most of the money which it provides for mortgages by borrowing from banks and other financial institutions.

[mattduke]

$this->bbcode_second_pass_quote('Tyler_JC', 'T')he federal reserve is perfectly capable of printing more paper in order to back up the electronic money.

Fractional reserve banking is a problem when the public demands gold because the bank only has 1/10 of the physical gold it needs.

But with regards to paper money, it is a rather simple process to create more of it without causing hyperinflation or chaos.

Just delete some 1s and 0s and create some dollar bills.

If the creation of paper money is balanced out by the destruction of electronic money, I don't see what the problem is.

(am I missing something here?)

[AlCzervik]

$this->bbcode_second_pass_quote('Tyler_JC', 'T')he federal reserve is perfectly capable of printing more paper in order to back up the electronic money.

Fractional reserve banking is a problem when the public demands gold because the bank only has 1/10 of the physical gold it needs.

But with regards to paper money, it is a rather simple process to create more of it without causing hyperinflation or chaos.

Just delete some 1s and 0s and create some dollar bills.

If the creation of paper money is balanced out by the destruction of electronic money, I don't see what the problem is.

(am I missing something here?)

[dukey]

the problem is money is issued as debt

[Cynus]

I never thought I'd live to see a realy bank run. First Countrywide, and now this. I wonder who will be the next domino to fall.

[manu]

Just print more pounds to give to the saps. You think Tony (witch hunt) Blair would have told them this.

[AlCzervik]

Northern Rock Share Trading Suspended.
Yahoo Finance.

[Twilight]

$this->bbcode_second_pass_quote('AlCzervik', 'N')orthern Rock Share Trading Suspended.
Yahoo Finance.

[Permanently_Baffled]

Alliance and Leicester,(another UK bank) shares have plummeted 36% today.

$this->bbcode_second_pass_quote('', 'S')hares in the Alliance & Leicester bank fell by more than 31% on Monday - much of the slump coming in the last half-hour of trading.

[mamoselle]

They can rush all day, they will not run out of money because they are not ready to crash the sytem yet. The printing presses are well oiled and can print a lot.