Northern Rock goes belly up?

[bigpete]

I see http://news.bbc.co.uk/1/hi/business/6994099.stm that NR is going cap in hand to the bank.. Hmm maybe they should not have turned down so many IVA's - at least they would have got SOME return!; Prats

[Cybus]

Shhhh ... quiet

Do you hear them ????

The violins ????

It's a pity someone at the Bank of England does not ask them the question why they have been turning down so many offers of re-payments, albeit reduced. Surely something is better than nothing ???

My heart bleeds - NOT

Tell it like it is.

[Storm]

You can be sure the Bank of England will bail them out to prevent melt down.

[lily]

Going to know what it feels like now arent they? Folks.

what goes round comes round, springs to mind.

lily

[fudge34]

From someone who NR have personally put through so much misery with rejecting my IVA - that ladies and gentlemen is called karma!

[lily]

but there is only one of you fudge, there are loads of them,

I have just had a funny image in my head, all these heads of suited people rolling down the steps at the county court.

lily

[james.c]

I never owed any money to NR

But i have always felt for the people who got their IVA rejected because of them, like me you were just trying to do your best.

In a small way I hope this brings a smile to everyone who as had problems with NR.

Good Luck

no matter how bad money gets, theirs stll alot more important things in life

[Skippy]

Perhaps McLaren Mercedes bank with Northern Rock - $100m fine would push anyone under!

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[mikebdomain]

I hate to dispel the yelps of yippee, but this is not particularly unusual, Barclays for example went to the Bank Of England twice in six weeks, the last time was last month.

Northern Rock have found it difficult to ‘sell their book’ (due to the crisis in the US, and US money men pulling out of sub prime investments) and therefore was getting low on funds for further lending. The are not the only lender with this problem.

I am more concerned with the realisation that the UK mortgage markets rely so heavily on US and other overseas funding. I hope the recent turn of events will start to change the way that business is done in the finance industry.


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[james.c]

I have just been watching tv about NR

Did you know that NR first started up not as a bank but buying debts of other companys.

It sounds like bank of england will bail them out, but they are not allowed to use takpayers money.

As a business man and common sense i wonder if NR have known they have been in toruble for some time and rejected IVA'a hoping that people would pay their debts back or go in to debt managment, and instead have gone BR.

Maybe and hopefully for all of you who owe NR money they will start to accept IVA's cause I imagine now they need as much money as possible back asap.

Andy, Meliane - Would do you think?

no matter how bad money gets, theirs stll alot more important things in life

[WhenInAHole]

I hate to dispel the yelps of yippee, but this is not particularly unusual, Barclays for example went to the Bank Of England twice in six weeks, the last time was last month.

I'm not sure this is the same thing at all...what seems to have happened with Barclays is that a combination of Market Chaos and IT systems failures led to their use of a standing emergency facility, see


http://www.telegraph.co.uk/money/main.j ... ank131.xml

What has happened with Northern Rock is, as the BBC article explains altogether more unusual

From the BBC Article

"The decision for the Bank of England to become the "lender of last resort" is extremely rare - and comes after consultation with the Treasury and the Financial Services Authority."

Just how rare this is and the process involved (basically a meeting at Governor of the Bank of England, Chairman of the FSA and Chancellor of the Exchequer level) can be seen here:

http://www.bankofengland.co.uk/financia ... y/lolr.htm

So whilst the imminent collapse of Northern Rock certainly looks unlikely this is certainly an unusual and serious step.

[MelanieGiles]

The relatively small write off provision which Northern Rock carries relating to personal insolvency cases, coupled with their own market research that indicates that less than 10% of people with rejected IVA's actually do go bankrupt (I suspect that figure is now rising!) is very unlikely to greatly affect the drop in the share price, which I gather is largely due to limited reserves.

All banks are suffering stock reductions at present, especially those who are linked to the US sub-prime market - and I agree with Mike that UK plc is far too reliant on matters eminating from across the pond. If we followed some of our European cousins a little better, we might learn something!

As one who quite obviously is a fan of the IVA as a methed of repayment to creditors, I do not understand Northern Rock's current policy or agree with it, however they obviously think that they making the right decisions for shareholders and have to be respected for that. If they decide upon a change in policy I will be the first to the door with a wealth of cases I have been unable to process.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[mikebdomain]

Highly unlikely James, they can raise a lot more and quicker money by rate increases and additional application fees. Already happening…

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Please read our Initial Disclosure Document(IDD):
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[WhenInAHole]

Highly unlikely James, they can raise a lot more and quicker money by rate increases and additional application fees. Already happening…

I agree, but they do need to be able to find the cash to lend and in NR's case that is much harder in current market conditions. They don't take large deposits and have to borrow on the markets for almost all their lending...meaning they are very exposed right now.

Whilst it is highly unlikely they will fail I don't think I'd be buying any shares in them either (if I had any money to that is!!)

[mikebdomain]

WhenInAHole

I was refering to the general lack of immediate funding - and going to the BOE rather than the reason for being in the situation.

This situation with NR was forseen last month as reported by the telegraph http://www.telegraph.co.uk/money/main.j ... rth117.xml

My point is they are not (well not yet) going down the pan...

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Specialising in adverse credit.

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