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Northern Rock: If More Savers Lose Their Nerve It's Curtains

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Northern Rock: If more savers lose their nerve it's curtains

Dan Atkinson, Financial Mail

16 September 2007


But with a full-scale run on the bank a distinct possibility, that could seem less like an emergency loan and more like a honeypot, attracting droves of savers fearful for their money. Should that happen, Northern Rock would be staring into the abyss.




Northern Rock has yet to touch the Government cash, but it is expected to start doing so in the next few days as IOUs come up for repayment. If this arrangement proves ineffective, Mr Darling could make more money available, or allow the bank to go under.




As one insolvency source said: 'Banks have no special right to survive. Northern Rock is no different.'




Or it could be nationalised by the Bank of England. This may sound extreme, but could be the least worst option if Northern Rock's problems threatened to sabotage confidence in other banks as well, triggering one bank run after another.



Edited by AvidFan

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