Talk:Northern Rock/Archives/2012

Emergency Lending

This is not the first time since the 1970's that the Bank of England has used the emergency lending facility, as the articles on Sky News and the The Telegraph confirm. —Preceding unsigned comment added by 03vaseyj (talk • contribs) 21:57, 13 September 2007 (UTC)

Indeed, but it is almost certainly going to be Northern Rock as Alistair Darling has said that no other lender had requested assistance.Fears about future of Northern Rock grow Yorkshiresky —Preceding unsigned comment added by Yorkshiresky (talk • contribs) 14:19, 14 September 2007 (UTC)

I'm not sure the 2 articles above are talking about the same thing- however the shortness of the articles and lack of detail means I'm not sure. Astrotrain 14:48, 14 September 2007 (UTC)

Barclays used the BoE's "lender of last resort" facility twice in August - see [1], [2]. There may be a distinction being made between the "standing" LOLR facility and the "emergency" facility that seems to have been made available to Northern Rock. However, the statement in the article that says Northern Rock "is the first bank in the UK to require funding from the Bank of England since 1972" is clearly wrong, so I have removed it. Gandalf61 12:11, 15 September 2007 (UTC)

The Barclays incident was different- it is relatively common for UK banks to sometimes borrow from the BOE at the end of a day. The Northern Rock case is different as its ongoing funding. Astrotrain 13:54, 15 September 2007 (UTC)

The BoE normally lends to UK banks through open market operations at the official bank rate for overnight loans and at market rates for longer term loans. The lender of last resort (LOLR) facility is different from normal lending because the BoE charges banks a penalty interest rate, typically 1% above base rate, for using this facility - this ensures that it really will only be used as a last resort. See [3] for further details. It was the LOLR facility that was used by Barclays - it was not normal overnight lending. The emergency facility offered to Northern Rock may be longer term, but it is clearly not the only recent use of the LOLR facility. Gandalf61 17:40, 15 September 2007 (UTC)

Such loans are not normally classed as the Bank of England acting as LOLR as they are overnight loans paid back the next day and are part of the BOE's normal role in the money markets. The Northern Rock has been given access to unlimited loans for unlimited periods to cover its liabilities. This is a rare occurance and last happened in 1972. Astrotrain 18:58, 17 September 2007 (UTC)

The news articles I referenced above say "Barclays has turned to the Bank of England as the lender of last resort for the second time this month after at technical breakdown in the clearing system". It seems quite clear that Barclays did use an LOLR facility. Do you have a source that says otherwise ? The emergency facility offered to Northern Rock may be deeper and longer term than the facility used by Barclays, but my point is that this is not the first time since 1972 that the BoE has acted as LOLR. Gandalf61 08:52, 18 September 2007 (UTC)

The news article is using the term incorrectly. It even states further down that this type of loan is not uncommon. In anycase, this is the first time that the Bank of England has rescued a bank since 1972. Astrotrain 20:07, 18 September 2007 (UTC)

Yes The Barclays use of BoE funds was totally different. It's all rather technical I'm afraid, but we must correct the article and I have done so. NBeale 21:53, 18 September 2007 (UTC)

Yes, I think your edit to the article clarifies the difference nicely. It is not so very unusual for the BoE to act as "lender of last resort", which is what it did for Barclays (I notice that Astrotrain does not provide a source to back up his assertion to the contrary). What is exceptional about the Northern Rock situation is that the size and duration of the LOLR facility requested by Northern Rock went so far beyind the BoE's usual activities that it required authorisation by the Treasury, under the Memorandum of Understanding between the Treasury, the BoE and the FSA. One minor correction - I think the correct terminology is Tripartite Standing Committee, rather than Tripartite Authority. Gandalf61 13:32, 19 September 2007 (UTC)

The article says, Northern Rock asked for Emergency Funding on 12/09/2007, but the cited BBC source does not say anything about the date. The only date connected with the Emergency Funding is 13/09/2007, when the BBC reported that Rock had being granted the funding. Timeline: Rock Crisis I suggest to change the article here, as there is no evidence for Rock asking on 12/09/. There was however a speech by Mervyn King, who assured, that if any bank would need funding, the Bank of England would provide it. One could interpret, that Rock had asked already at this point, but that is specualtion! Andiloew (talk) 23:04, 20 April 2008 (UTC)

Disputed text

In one incident, police were called to the branch in Cheltenham, Gloucestershire when two joint account holders barricaded the bank manager in her office after she refused to let them withdraw £1 million from their account. Their money was held in an internet only account, which became inaccessible after the Northern Rock website crashed due to the volume of customers trying to log on

I don't see how the actions of one member of the public are relevant to the article. I removed it, but my edit was undone, so I'm putting it up for discussion here. Should it stay or go? --h2g2bob (talk) 15:05, 17 September 2007 (UTC)

While it isn't real very encyclopedic, it is of note, and attracted a fair bit of attention, as well as illustrating the lengths some have gone to to withdraw their money. Stay I'd say. Larklight 18:09, 17 September 2007 (UTC)

It's a significant incident in the crisis, and makes an illustrative point to the chaos at Northern Rock branches throughout the UK, and the problems with on-line accounts. It was widely reported in the UK and foreign press. Astrotrain 18:45, 17 September 2007 (UTC)

The report of the incident finishes without a conclusion

What has happened since? Is the bank run still ongoing? have things settled down? have they been bought out? have they gone bust? —Preceding unsigned comment added by Plugwash (talk • contribs) 15:13, 25 September 2007 (UTC)

Added relevant information how the situation was calmed down. Andiloew (talk) 23:18, 20 April 2008 (UTC)

More information becomes available

Various Internet sites have published the following text, which allegedly formed the executive summary of a plan, put together by Merrill Lynch, Citi and The Blackstone Group, to sell stricken mortgage lender Northern Rock, code-named Blackbird. The web sites claim this "Briefing Memorandum" has been sent to all potential acquirers.

Text Deleted Preceding unsigned comment added by GrahamSmith (talk • contribs) 06:19, 15 November 2007 (UTC)

I have now removed the Project Blackbird text as the website I copied it from does not have a GFDL-compatible license. Preceding unsigned comment added by GrahamSmith (talk • contribs) 06:42, 15 November 2007 (UTC)

TV programme

BBC2 Run on the Bank: Northern Crock Friday, 9 Nov 2007 7:00pm - 7:30pm (30 minutes) -- John 14:07, 9 November 2007 (UTC)

Fair use rationale for Image:Northern Rock Logo.png

Image:Northern Rock Logo.png is being used on this article. I notice the image page specifies that the image is being used under fair use but there is no explanation or rationale as to why its use in this Wikipedia article constitutes fair use. In addition to the boilerplate fair use template, you must also write out on the image description page a specific explanation or rationale for why using this image in each article is consistent with fair use.

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BetacommandBot (talk) 17:52, 2 January 2008 (UTC)

2007/8 rewrite

Is anyone up for the task of rewriting the article; to tidy it up and update it properly after the fate of the bank is sealed?

Also, in the event that whoever gains control of the company changes the name; does anyone think the page should be entirly moved to the new page, or have the Northern Rock article left as it is and a new article created? SkeletorUK (talk) 22:01, 22 January 2008 (UTC)

No, because as everyone has their own pet piece of information, such rewrites become fraught <g> ! If you use Wikipedia:Recentism as a guide you might well be able to reduce it to a few paragraphs. It might be worth asking the League of Copywriters for help. I don't know what the guidelines say, but Midland Bank is separate from HSBC which took it over in 1987. -- John (Daytona2 · Talk · Contribs) 18:50, 23 January 2008 (UTC)

Floated

The article states that the society was floated on the London stock exchange. I'm not familiar with this expression. Does it mean that shares of the society were offered..floated...on the stock exchange? JGC1010 (talk) 23:53, 17 February 2008 (UTC)

Yes - from wikt:float, to float is "to issue or sell shares in a company (or units in a trust) to members of the public, followed by listing on a stock exchange." --h2g2bob (talk) 00:03, 18 February 2008 (UTC)

Can someone dig out a graph please of the NR Shareprice? These were easily available when NR was listed, all I found was a graph on this page http://news.bbc.co.uk/1/hi/business/6994328.stm showing fall from peak of over 1000p. Such a graph would show problems with NR business were recognised by stock market long before its collapse. John a s (talk) 11:47, 4 January 2009 (UTC)

I'm working on it now, I'm doing a 3 year graph based on figures from Yahoo Finance. --TubularWorld (talk) 20:54, 4 January 2009 (UTC)

Belated thanks, I see the graph is now on Nationalisation of Northern Rock. Any chance of doing a similar graph for Halifax/HBOS shares please? John a s (talk) 22:01, 8 February 2012 (UTC)

Public ownership

As of 18 February the bank remains in private hands. The public takeover will not occur until the legislation goes through Parliament. So changes to the effect that NR is nationalised or in public ownership are premature. Harry the Dog (talk) 13:10, 18 February 2008 (UTC)

As of 22 Feb, the bank is in public onwership: http://news.bbc.co.uk/1/hi/uk_politics/7258492.stm The article might want to be changed now. —Preceding unsigned comment added by 129.31.206.206 (talk) 12:49, 22 February 2008 (UTC)

borrowing figures are not a measure of the cost to taxpayers.

the article points out that Government has added northern rock borrowing to its own borrowing total and the additional borrowing is about £100m. however the Government hasn't spent £100bn as the borrowing is matched to a large extent by assets which the Government has also acquired. the government's costs aren't known but they likely to be in the hundreds of millions not £100bn. it therefore misleading to suggest that that the borrowing would add 28p to taxation. I propose to delete that reference and leave the reference to £3000 per family but make clear that this refers to additional borrowing not spend. —Preceding unsigned comment added by 86.140.7.39 (talk) 23:25, 17 July 2008 (UTC)

How much was it purchased for in the end (or is that still in discussion)

The emergency law says that the shareholders would be paid what the bank would be worth if all government support was withdrawn. Have the government tried to argue that figure would be zero? If not what value did they put on northern rock and is that value being challanged in any way?

Can we find out more about this through http://www.whatdotheyknow.com/ ? – Kaihsu (talk) 10:58, 22 July 2008 (UTC)

I have put something in: http://www.whatdotheyknow.com/request/cost_of_northern_rock_transfer Someone else can ask about Granite. – Kaihsu (talk) 16:51, 22 July 2008 (UTC)

The Treasury has given a partial answer; nonetheless informative. – Kaihsu (talk) 14:41, 20 August 2008 (UTC)

Split article

Does anyone think that it might be wise to split the Northern Rock article into two parts, like what has been done with the Federal takeover of Fannie Mae and Freddie Mac? We could have the main Northern Rock article being simply about the bank, with a short paragraph noting the 2007 credit crisis and nationalisation. The second article could just be the complete text as it currently is on the nationalisation of the bank.

I have constructed my proposed articles, and they are located at old versions of my sandboxes:

• Northern Rock article - User:TubularWorld/Sandbox
• Nationalisation of Northern Rock article - User:TubularWorld/Sandbox2

--TubularWorld (talk) 16:39, 5 October 2008 (UTC)

Seeing as no one has given any input, I have decided to implement my change. --TubularWorld (talk) 15:49, 9 October 2008 (UTC)

Biasedness?

"In doing so the Government effectively stole ownership away from its share holders some of whom had their lifes savings in company shares."

The emotive use of "stole" here screams biasedness... —Preceding unsigned comment added by 62.31.38.75 (talk) 15:08, 7 October 2009 (UTC)

I've changed the wording, hopefully it is a little better, still tried to keep the same content though. TubularWorld (talk) 17:42, 7 October 2009 (UTC)

Research Needed

"The nationalisation was a result of two unsuccessful bids to take over the bank, neither being able to fully commit to repayment of taxpayers' money. In doing so the Government effectively took ownership away from its share holders, and as of October 2009 without reimbursement."

Where is the evidence of this? At least provide a link to a source that reports this please. Also the webpage linked to cite note 12 carries no mention of anyone's "life savings". Is it possible for someone could provide a link to a page that goes into a little more detail? —Preceding unsigned comment added by 82.36.245.100 (talk) 14:35, 24 October 2009 (UTC)

"In doing so the Government effectively took ownership away from its shareholders, and as of October 2009 without reimbursement."

This is not a balanced statement. The government was Northern Rocks largest creditor. When any company gets into financial difficulty the debt holders (bond holders) are entitled to the assets, the shareholders come lower in the pecking order, and often receive nothing. It's all about risk vs. reward. Historically, shares give higher returns (~4%pa) than bonds, because they are riskier.

"The media also reported cases where some shareholders had their life savings in the shares, which were taken from them."

Oh phuleeese ?! Media found some stupid people who had decided to risk all their eggs in one basket, going against one of the fundamental rules of investment, and for that matter, common sense. There are always a few people who do this in any crisis eg Barings, BCCI. It's an extreme situation, which is why the media highlight it, it should not be in an encyclopedia, unless a balancing statement is made about all the people who made sensibly diversified investments. -- John (Daytona2 · Talk · Contribs) 16:23, 22 March 2010 (UTC)

I agree, John. The shares were virtually worthless when HMG took over. Most of the shareholders' money was already lost. 86.129.158.0 (talk) 13:10, 10 February 2011 (UTC)