Northern Rock savings reallocated
by Gill Montia
Story link: Northern Rock savings reallocated
The UK’s leading High Street banks are benefiting from Northern Rock’s difficulties as its former customers seek a safe haven for their money.
Barclays has reported an influx of millions of pounds in deposits since savers withdrew up to £2 billion from Northern Rock.
Lloyds TSB and Abbey are also opening new savings accounts daily, for [...]
Credit Suisse London jobs to go
by Gill Montia
Story link: Credit Suisse London jobs to go
Credit Suisse is the latest bank to cut jobs as a result of the global credit squeeze, having made 150 employees redundant from its mortgage-backed securities business.
The jobs losses are mainly at the Swiss bank’s New York offices but there will also be a head count reduction in London.
The bank summed up the situation in [...]
FSA concerns over Sipp sales
by Gill Montia
Story link: FSA concerns over Sipp sales
The Financial Services Authority (FSA) has raised concerns over the sale of self-invested personal pensions (Sipps), which are being recommended by some advisers when a stakeholder or personal pension would be more appropriate, and could possibly even be better value.
The Authority has found that financial advisers are recommending Sipps because they offer a wide fund [...]
Banks shun BoE £10bn auction
by Gill Montia
Story link: Banks shun BoE £10bn auction
Yesterday’s £10 billion auction by the Bank of England failed to attract any bids.
Last week’s decision to release the money left the bank’s Governor, Mervyn King, being accused of a U-turn.
He had previously stated that it was not the job of the Bank of England to inject cash into the money markets.
However, following the Northern [...]
Credit card holders look to consolidate
by Gill Montia
Story link: Credit card holders look to consolidate
Abbey, part of the Santander group, has published new research on the credit card habits of UK adults, which shows a growing awareness of the benefits and pitfalls of credit card use.
The majority of British consumers have an average of two credit cards but 22% hold three or more.
The average credit card customer holds cards [...]
Treasury takes advice on Northern Rock as dividend cancelled
by Gill Montia
Story link: Treasury takes advice on Northern Rock as dividend cancelled
According to reports in the press, the government has appointed Goldman Sachs, the US investment bank, to offer advice on Northern Rock.
Northern Rock’s difficulties hit the headlines on September 14th, when the Bank of England stepped in to offer emergency funding as the “lender of last resort”.
Last week, the Chancellor of the Exchequer guaranteed saver’s [...]
BBC exposes UK sub-prime malpractice
by Gill Montia
Story link: BBC exposes UK sub-prime malpractice
The BBC has been investigating the UK’s sub-prime mortgage market and has found evidence of serious mis-selling.
Journalists working for BBC Radio 4’s File On 4 programme spoke to those on the inside of the industry who admitted that people have been advised to lie about their incomes and take out loans far in excess [...]
Lenders take up responsibilities
by Gill Montia
Story link: Lenders take up responsibilities
The Chancellor of the Exchequer’s recent call for banks to exercise responsible lending has been followed by a number of lenders reducing their borrowing limits.
Fears over bad debt, combined with the difficulty in borrowing money on the global markets, are making their mark amongst consumers.
This week Barclaycard reported that it is turning down around half [...]
Savers exercise caution
by Gill Montia
Story link: Savers exercise caution
Peopleschampion.com is convinced that consumers are becoming increasingly cautious with their savings in response to volatile financial markets and the Northern Rock crisis.
According to Jim Spowart, chairman of the price comparison website, high rates of interest are losing ground to savings plans with a “safe haven” feel.
In a survey of Northern Rock customers, Peopleschampion found [...]
Barclaycard tightens credit limits
by Gill Montia
Story link: Barclaycard tightens credit limits
Barclaycard, the UK’s foremost issuer of credit cards, has been reviewing the credit limits held by many of its customers, whilst at the same time rejecting an increasing number of applications for new cards.
The review has been underway since the beginning of 2007 and reflects general concern about the availability of high street credit.
However, [...]
Chancellor reviews loan protection scheme
by Gill Montia
Story link: Chancellor reviews loan protection scheme
The Chancellor of the Exchequer, Alistair Darling, is considering a wide range of financial reforms in response to the difficulties experienced by Northern Rock, which had to be rescued by the Bank of England following a run on the bank.
The existing UK deposit protection scheme guarantees 100% of the first £2,000 of a saver’s money [...]
E-savings frozen in small print
by Gill Montia
Story link: E-savings frozen in small print
Savers exercising caution after the difficulties experienced by Northern Rock may be surprised by reports in the press that Egg, the Internet bank, changed its terms and conditions last year to prevent a run on the bank.
In late 2006, Egg amended its contract with customers to allow accounts to be frozen for up to 60 [...]
A&L softens overdraft charges
by Gill Montia
Story link: A&L softens overdraft charges
Alliance & Leicester (A&L) is introducing a daily fee for customers with overdraft agreements, whilst also pledging to continue to offer free banking to account holders who remain in credit.
The bank has reviewed the charging structure for its current accounts and from October, will become the first UK bank to end interest charges on [...]
Savers scrutinise loan books
by Gill Montia
Story link: Savers scrutinise loan books
According to Moneysupermarket.com, the price comparison website, savers spooked by recent events at Northern Rock are seeking to invest in banks that have relatively small loan books.
As a result, Bradford and Bingley has benefited from an influx of new savers, many of whom are choosing its instant access savings account which pays interest at 6.26%.
Bradford [...]
Northern Rock guarantee terms published
by Gill Montia
Story link: Northern Rock guarantee terms published
The Treasury has published details of its guarantee to existing Northern Rock savers.
It will cover all accounts existing at midnight on Wednesday September 19th and guarantees future interest payments, movements of funds between existing accounts, and new deposits into existing accounts.
The guarantee will also be extended to accounts closed between September 13th and September 19th, [...]
BoE Governor answers to MPs
by Gill Montia
Story link: BoE Governor answers to MPs
The Governor of the Bank of England, Mervyn King, will today defend the bank’s handling of the Northern Rock crisis and its policy on market intervention, before the Treasury Select Committee.
Yesterday the bank pledged to inject an initial £10 billion into the money markets to ease the credit shortage, after previously declaring that such action [...]
Northern Rock executives under fire
by Gill Montia
Story link: Northern Rock executives under fire
Senior executives at Northern Rock have been criticised for continuing with plans to distribute £60 million to investors next week, despite the bank having been rescued by the Bank of England in the last few days.
The queues of savers waiting to withdraw funds have subsided since the Chancellor of the Exchequer guaranteed their savings [...]
Bank of England to auction £10 billion
by Gill Montia
Story link: Bank of England to auction £10 billion
The Bank of England (BoE) has reassessed its position in relation to the problems on the money markets and is prepared to alleviate the credit shortage by injecting £10 billion into the markets.
The move is aimed at reducing the London Interbank Offered Rate (Libor), which is the interest rate applied to inter-bank lending.
Libor has been [...]
Federal Reserve rate cut challenges BoE
by Gill Montia
Story link: Federal Reserve rate cut challenges BoE
America’s central bank, the Federal Reserve, has reduced interest rates by half a percentage point.
The move is seen as an attempt to prevent the global credit crisis leading the US economy into recession.
The decision by the central bank was unexpected and will put pressure on the Bank of England to reduce interest rates in the [...]
Lack of knowledge deters stock market investment
by Gill Montia
Story link: Lack of knowledge deters stock market investment
The Association of Investment Companies (AIC), the trade organisation for firms dealing in closed-ended investments, such as investment trusts, has published the findings of its June survey on attitudes to the stock market.
The survey found that despite recent events, the most significant deterrent to potential investors is lack of knowledge and understanding, rather than the [...]
