Alliance & Leicester (A&L) the UK’s seventh largest bank, is riding out a crisis prompted by rumours that it could be exposed to similar problems to those encountered by Northern Rock. The bank’s share price fell dramatically on Monday, so that by the end of the day’s trading it had lost one third of its [...]
The Chancellor of the Exchequer, Alistair Darling, has reassured savers with Northern Rock by promising to guarantee all current deposits. The move, in which the Chancellor pledged the support of the Government and the Bank England, is aimed at stemming the flow of withdrawals from the bank. Mr Darling is reported as saying that he [...]
Royal Bank of Scotland (RBS), which is heading a consortium making a €71 billion bid for ABN Amro, the Dutch bank, will be reassured to know that ABN is on course to achieve its financial targets, despite the recent turmoil on the money markets. ABN has reported that it expects its capital strength to be [...]
Leading investment banks such Lehman Brothers, Goldman Sachs and Morgan Stanley will be reporting their third-quarter figures this week and these are expected to begin to reveal the banks’ exposure to losses in the US sub-prime mortgage market. Analysts will be scrutinising their valuation of securities linked to sub-prime loans, although investment banks can legitimately [...]
Symantec, the security firm, is raising awareness about Internet crime, which it sees as developing into a major commercial activity. In a newly published report, Symantec describes underworld auction sites where bank and credit card details can be purchased, along with the software used by criminals to attack websites. Also for sale are phishing kits, [...]
Northern Rock has paid out almost £2 billion to its savers since the end of last week and is expecting withdrawals to continue in the coming days. The UK’s fifth largest mortgage lender was forced to approach the Bank of England, as a “lender of last resort” on Friday, because of the current difficulties on [...]
Northern Rock, the UK’s fifth largest mortgage lender, has received emergency funding from the Bank of England. Unlike most other banks, Northern Rock raises the majority of the money it uses for mortgage lending in the wholesale credit markets. In the main, other UK mortgage lenders use money in their deposit accounts for their mortgage [...]
The Chancellor of the Exchequer, Alistair Darling, has spoken publicly about the need to bring an end to an era of free and easy lending by the banks. Mr Darling believes that such lending has been responsible for a credit boom that went beyond sensible limits and he is calling for a return to ‘good [...]
Moody’s, the credit ratings agency, expects the rate of bankruptcies of highly leveraged companies (that is to say companies with significantly more debt than equity) to increase substantially over the coming 12 months. In recent times, bankruptcy and default rates for businesses have been at record lows because companies have had little difficulty making repayments [...]
The Office of Fair Trading (OFT) has reported that it is reconsidering its decision to pursue a test case in the High Court, to establish the legality of bank penalty charges. However, the regulator has stated that the case will only be withdrawn if banks put forward an agreeable compromise that is in the best [...]
The Citizens Advice Bureaux (CAB) has published figures showing that debt enquiries in England and Wales have reached a record high. In the last year, the CAB recorded a 20% increase in such enquiries bringing the total number to 1.7 million, double the level of ten years ago. For the CAB this means that consumers’ [...]
Lloyds TSB is the first of the High Street banks to announce that it will be reducing its charges for unauthorised overdrafts, from 2nd November this year. The bank will cut its interest rates for unauthorised borrowing by approximately one-third, whilst also lowering charges for unauthorised overdrafts and bounced cheques. From November, customers who had [...]
Rumours of job cuts in the City are gaining ground with the news that some of the large banks are freezing recruitment. US banks, including Bear Stearns and Lehman Brothers, are reported to be reducing staff by over 2,000 as a direct result of the US sub-prime mortgage crisis. At the same time recruitment specialists [...]
Some City analysts are warning that this week, the money markets could experience the worst crisis for 20 years. According to Lehman Brother, the investment bank, $113 billion of commercial paper (effectively money market IOUs) are due for refinancing in the coming days. This refinancing will mainly come through London and exceeds the $100 billion [...]
Chiltern, the debt management specialist, estimates that approximately four million Britons are in serious debt and that the majority are in denial of their predicament. According to a survey by Chiltern, one in 16 people in the UK spends more than 25% of their monthly earning in paying off unsecured debt. However, of this group [...]
The Bank of England’s Monetary Policy Committee (MPC) is keeping the base rate at 5.75%, in September. The bank’s announcement was accompanied by a statement in which the MPC said that it had considered the effects that recent pressures on the credit markets could have on the rate of inflation. The committee believes it is [...]
The Bank of England (BoE) has promised to provide up to £4.4 billion in addition reserves, against which institutions can borrow at the current base rate of 5.75%. The bank has remained silent over the pressures on the money markets for four weeks but its actions yesterday brought about a reduction in interest rates between [...]
Britannia Building Society has successfully challenged HM Revenue & Customs (HMRC) over the taxable status of the windfalls paid to some of its members. The case centred around the building society’s 300,000 members with Isas and child trust funds. In February of this year, Britannia paid out £51 million in loyalty bonuses to members with [...]
The Financial Services Authority (FSA) has introduced a new framework for recognising industry guidance, which forms an important part of the authority’s plans to move towards principles-based regulation. The framework allows trade associations, professional bodies and companies to seek formal confirmation for the guidance they produce to help their members understand and comply with the [...]
