Northern Rock losing 100% Government Guarantee soon

I read this morning that within the next few weeks the British government will be giving notice that they are removing the 100% government guarantee which currently applies to all deposits in Northern Rock (including the Irish branch). The current agreement says that in the event of the guarantee being removed, customers will be given 3 months notice.

I have a large sum invested in Northern Rock in Dublin as I have little faith in the Irish banking system or the guarantees of the Irish government and am wondering what to do next. I suppose the most sensible thing now would be to try to open an account overseas in a financially more stable country?

I know many of you on this forum have been keeping your savings safe at Northern Rock. What are your thoughts/plans after this news?

Not sure on this but bear in mind that Demand Online is now only offering 2.5% so it's less desirable for me anyway.

Is Northern Rock not 100% owned by the British governmet?

I would have thought that they would have to honour all deposits were the bank to get into more difficulties.

The same should apply with Anglo Irish here.

Perhaps I am wrong, though.

callybags said:

Is Northern Rock not 100% owned by the British governmet?

I would have thought that they would have to honour all deposits were the bank to get into more difficulties.

The same should apply with Anglo Irish here.

Perhaps I am wrong, though.

Click to expand...

The British government are splitting NR into good bank/bad bank and selling off the good part shortly so they won't own them for much longer hence the removal of the guarantee.

I think it's best to wait until you get the notice to decide what to do.

Brendan

All you need to know:
http://business.timesonline.co.uk/t...ectors/banking_and_finance/article7021216.ece

Just curious on this, but what will it take to get people to start having more faith in banks in terms of deposit security? There was a time when few knew about deposit protection schemes, and now its the total opposite, which is a good thing.

But the time has to come when blanket guarantee schemes have to be withdrawan and depositors will be left with a) trusting their banks b) spreading they money across as many banks as nesserary for those fortunate to have deposits that exceed the Deposit Protection Scheme.

Personally I hope for option a as it will start to give confidence into daily banking but Im sure it wont be easy!

Key bit here if your not a big invester...

Once announced, Northern Rock will give three months’ notice before removing the guarantee. At that point depositors will be in the same position as depositors with other banks — whereby the Financial Services Compensation Scheme will cover £50,000 for each individual, or £100,000 for a joint account.

Click to expand...

Bobby1 said:

Just curious on this, but what will it take to get people to start having more faith in banks in terms of deposit security? There was a time when few knew about deposit protection schemes, and now its the total opposite, which is a good thing.

But the time has to come when blanket guarantee schemes have to be withdrawan and depositors will be left with a) trusting their banks b) spreading they money across as many banks as nesserary for those fortunate to have deposits that exceed the Deposit Protection Scheme.

Personally I hope for option a as it will start to give confidence into daily banking but Im sure it wont be easy!

Click to expand...

I agree with this.

i think there is a lot of unjustified paranioa doing the rounds.