Experts say that Northern Rock is not in danger of going bust
Northern Rock has been in the throes of a funding crisis and has had to ask the Bank of England for a loan.
The bank is the very latest casualty of the global credit crunch.
Northern Rock insists that it is safe, a view also held by the Chancellor, the Financial Services Authority and the British Bankers' Association.
We asked for your comments, a selection of which are below. This debate is now closed.
This is something akin to mass hysteria; if Northern Rock goes under it will be the fault of both its customers and the media and not the volatile market. The atmosphere of blind panic generated by droves of savers flocking to join ever growing queues is self-perpetuating. Such behaviour is fickle, selfish and incredibly short sighted.
If the housing market slows and house prices start to fall then the security of the loans provided by Northern Rock (and other banks) is lost. Then see how much more money is withdrawn: it would be a bun fight. This point seems to have been missed, but is why it?s all gone badly wrong in the US. The run up to the sub prime issue in the US was very much like it has been over here, strong economy recovering from a low, higher than average house price inflation, loans to anyone even if they can't pay it back, falling unemployment.
The Northern Rock saga made me aware of the limited guarantee on Bank Savings. Before the previous weekend I had wrongly assumed all of my savings were protected if a major UK bank were to become insolvent. Given the relatively low limits, I have been motivated to open new savings accounts so as to spread our savings and therefore acquire protection, up to the standard limits, on each account. One of the accounts I opened today was with Northern Rock where I have deposited £2,000. No matter what happens to the Bank this amount will be guaranteed ? even if the recent government undertaking is withdrawn. It has just occurred to me that if a significant proportion of investors followed suit they would both spread their personal risk and help the Bank to recover.
Brian Roberts, Sandbach
If the money markets won't lend money to Northern Rock, why on earth should depositors lend them their money?
Steve Frost, Billingham
I have been trying to access my online account since Friday 14th September, not to withdraw all my money but simply to get sufficient funds out to pay for a new kitchen I am having fitted. I can't get through and am so exasperated that when, (or if), I eventually do succeed I will almost certainly withdraw all my funds and never trust an online account again!
The irony is that the people most worried about Northern Rock collapsing are (understandably) contributing to that collapse becoming a reality. A good defensive strategy is never to put all one's savings with one provider. Also no more than £35,000 of savings should be placed with any one organisation so as to make best use of the financial compensation scheme. This strategy can be thwarted by mergers and takeovers. For example, anyone whose savings were split between the Nationwide and the Portman should rethink calmly in the wake of the recent takeover.
Chris Grey, Guildford
I'm a Northern Rock online customer and have been unable to access my account since last Thursday. The lack of service alone is reason enough to close my account.
I agree that customers have only been given re-assurances rather than a solid guarantee by either Northern Rock, the FSA, Bank of England or the government. I was not alarmed by the first announcement on Thursday, but I am now! I still cannot access my money which is my only source of immediate funds.
Sharon Field, Morpeth, Northumberland
After 36 hours of trying I finally got into my online account at Northern Rock. If they don't go bust before the BACS transfer, my £30k is as safe as HSBC for now... Amongst the "reassurances" that our money was safe I heard no guarantees only opinions. If (sorry, when) Northern Rock goes legs up I feel quite confident that its savers be the losers. Where is a safe haven for my cash now? Which institution will be next on the list? I don't have all my eggs in one basket but that doesn't mean I would accept the loss of one basket of £30k with equanimity. I want to be at the head of the queue next time, not battling for 36 hours.
There may be a lot of people in debt in the country, but those who do have savings are likely to be quite prudent, probably risk-averse people. I am not at all surprised that, in the circumstances, they are taking the precaution of getting their money back. For anyone with good life savings - perhaps from the maturing of a pension or endowments - a compensation scheme which only partially covers the first £30-odd thousand is wholly inadequate. What is more, people rightly think that, should they lose money in excess of this, there will be a deafening silence from the financial authorities and the government. Just look at the paltry amounts they have offered to people who lost pensions when companies closed - and only then after massive arm-twisting.
Alison Keys, Brigg, North Lincolnshire
If I had cash with Northern Rock I would be right there in that queue.
I have no trust in any financial institution whatsoever. I don't think I am alone in that attitude. Ask those who, in past crises, have lost their pensions, homes or life-savings. Were they not given the same assurances? We are obliged to use "financial services". When things go wrong, we, the customers, pay the price, not the boards of directors.
I tried all day with the website yesterday and even got up at 2am to try again. Like your listeners, I was convinced they were blocking access. However at 9am today I got through and have closed my account. I feel bad about it because I realise it could cause them even more problems.
All your commentators are whistling in the wind. There has been a long series of events (Equitable Life, pensions, endowment mortgages) in the course of which, the government and other organisations have shown that the customer or employee will be last in the line to be compensated if the business does collapse. People know that others have lost everything in the past. Northern Rock cannot be held responsible for poor communication when the cause has been years of experience.
Ms H. Cook, Birmingham
You spent half your programme complaining the Northern Rock website couldn't cope with the surge in activity. Just how much must these banks spend on computers to cope with a once in eighty years surge in activity?
You seem to be saying no one should worry, but the BBC made a big fuss about the Bank of England loaning money to Northern Rock: if it was trivial why did the BBC lead so many of their news bulletins with that?
Would there be any possibility that there is a move to push Northern Rock out of business - a competitor, or other commercial motive? What would the conspiracy theorists out there say?
Amanda Clegg, Godalming
We kept being told that Equitable Life was solvent but people still lost a lot of money.
Andrew, Tunbridge Wells
The bottom line is - no one has any confidence or trust in the financial institutions, financial experts and politicians. As an Equitable Life member, the consumers have the power to act, and they have.
Trevor Ingman, Fittleworth, West Sussex
In view of Northern Rock's current woes, it seems extraordinary that they have no information about the crisis on their website, other than the Stock Exchange statement issued yesterday. What an appalling example of customer relations. Ignoring the problem on their website is not a solution.
Terry Cartwright, Farnham, Surrey
As a Northern Rock customer, I am most annoyed that there is no way to access my savings. They are in an online account and Northern Rock says the account can only be accessed via the web, not phone or branch visit. The website has not functioned since at least Thursday evening. If the bank wishes to avoid panic, it should provide some means to access funds.
Bob Grindrod, Huntingdon
There are reports today that Northern Rock customers have withdrawn some £1bn. However, presumably these are customers with access to Northern Rock branches. For those, such as ourselves, who have an internet account, it has been impossible over the last couple of days to log-on, either because the site says that it is "experiencing technical problems" or, more recently, because the site is very busy - "please try again". One "tries again" repeatedly with the same lack of success. Is Northern Rock deliberately frustrating the wishes of internet customers to carry out transactions?
Hein Velissarides, Woking
What about internet customers who cannot storm and panic and withdraw their money? It should have been foreseen that people would panic and a block should have put on withdrawing their money - at least until calm and common sense could prevail. Media hype, once more, causes panic. We cannot all bombard the bank, we have to sit and wait until the internet is up and running again. I wasn't going to panic until I saw the run on Northern Rock.
Jackie Palfreman, Balintore, Highlands
Those panicking customers who are queuing to withdraw their money aren't doing anybody (including themselves) any favours. There is no immediate danger of Northern Rock going bankrupt and nobody is going to lose their savings. However, as a customer of Northern Rock since it was a mutual (and I wish it still was) I own shares which are plummeting in value as a result of this behaviour. Given time, the business will bounce back and so will the share value. We've seen it before with M&S, Sainsbury's - all sound businesses whose shares fell in value temporarily because their profits weren't quite as good as they used to be. Unfortunately, Northern Rock is likely to get bought out by another bank while the shares are cheap and those of us who used to own the business as customers, will be paid a fraction of the real value. Once again the big banks win and the small customers lose.
Ian Nicholson, Glasgow
The fundamental question is why the financial bodies (government, Bank of England, Northern Rock etc.) have not been able to explain to intelligent but non-expert people why the current situation is "OK". We get the serious talking head saying "we have confidence" but then we don't get an explanation of why. I want to know and I'm prepared to learn quickly. Please tell us! Robert Peston's blog seemed a good start but even that left me wanting more.
Jeremy Wheeler, Reading
In the Northern Rock crisis, the Chancellor, the FSA and the Bank of England are all telling savers not to panic and deal as normal, but thousands of online savers cannot access their money because the online section of the Northern Rock website does not work. Whether this is due to overload or technical problems is not clear but the perception could be that it has been switched off. What a simple way to stop outflow. Online savers have been given no explanation or been offered any alternative means of accessing their savings. Is it any wonder no one believes anything they are told from on high these days?
Alan Morris, Glasgow
My life's savings are in Northern Rock. I only hold a postal account. Although very concerned, I understood the need for people not to panic and to allow the systems put in place by the Bank of England to flow into action. However, like me, people are concerned that they will lose their savings, hence the huge queues! What should I do? If I withdraw my savings will I get my money or simply compound the problem? Will Northern Rock even open the post to address all these queries, or can I demand my money at the counter like everyone else?
Very concerned pensioner, Angela, Kidderminster
Surely Northern Rock should have been put into some form of administration as part of the Bank of England bail-out, heading off the stampede that is threatening to ruin non-panickers such as myself. While I would like to agree with the comment of Paul Lewis on TV this morning that the Bank of England cannot afford to let Rock go bust, what does that really mean for savers - and how long are the guarantees and assurances of the Chancellor, the FSA, Angela Knight et al good for?
Colin McAlpin, Tonbridge
The current crisis at Northern Rock suggests that it is time for the current financial compensation system to be raised from the existing 100% of the first £2000 and 90% of the next £33,000 to a more realistic level.
Brian Kelly, Didcot
If the government and Bank of England are convinced that Northern Rock is a sound business, then why don't they declare that all investors have 100% security backed by the government? That would surely then stem the run on the bank.
The comments we publish are not necessarily the views of the BBC but will reflect the balance of views we have received. It is helpful if contributors state if they work for any organisation relevant to an issue discussed. Readers should form their own views on whether messages published represent undeclared interests, or views prompted by a common source.