UK bank crisis deals blow to Brown’s reputation – Reuters.co.uk: British Prime Minister Gordon Brown’s reputation for economic competence is taking a knock as his government battles to stem the country’s worst bank run for decades.
It gets to be quite worrisome when you see people queuing on the street to take their money out of the bank.
A government promise late on Monday to guarantee savings held at the embattled Northern Rock bank appeared to have eased a five-day crisis which led to anxious savers lining up to withdraw their savings from the bank’s branches.
This makes you think about the financial health of the other banks.
Opposition Conservatives painted the Northern Rock crisis, which stems from a global credit crunch, as a symptom of a decade-long credit binge presided over by Brown.
“The British economy has been buoyed up on too high a level of debt,” Conservative former finance minister Kenneth Clarke told the BBC. “Brown, who used to scoff at these warnings, must now be regretting it,” he said.
We would have had a run here, but that would require Americans to actually have savings…. 🙂
#1 – har!
Anyone who is even half aware of the situation and is not incompetent would realise that the situation in this case was out of the control of the prime minister anyway. The actual problem root lies with the american morgage situation, not with Northern Rock which withholding this situation would have normally had no issues.
And all because little Michael Banks wanted his tuppence back to feed the birds.
4 – Retirement accounts are heavy investors in the stock market, and in mortgages.
You (and I) could be in a world of hurt.
On my walk to work earlier this week I was going past a Northern Rock branch with the big queue out the door a couple of days running.
I was imagining a “Its a wonderful life” scene inside with the desperate branch manager doing a James Stewart speech.
and have it all go wrong.
Without any money in there myself it was easy to say what are they queuing for? (the govt had guaranteed the money at the time) but if it were my life savings….. I probably would have been in the queue.
Makes me think about what my grandmother used to say: “Never a borrow nor a lender be”….. if that isn’t good advice, I don’t know what is!
I’ll bet these sorts of “runs” happen, because the rich get theirs out first. I knew of a rich lawyer who got his million out of a local S&L the day before it collapsed. And back in the fall of 1929, major investors pulled out of the stockmarket just before “black thurday” and the crash. They probably helped trigger it. They certianly worsened it. And they sat on their ill-gotten gains, while the US government tried to figure out how to keep its value from suffering. Meanwhile, everyone else suffered. And the “new deal” has been criticized for prolonging the depression, rather than easing it.