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Banking crisis

New York Stock Exchage
BBC Radio 4's Money Box
Saturday, 27 September
at 1204 BST
On Radio 4 and Online

Anxiety continues across world markets as American legislators debate the controversial $700bn rescue package for the crisis hit banking industry.

But the talks have been stalling because Congressional leaders cannot reach an agreement.

In an attempt to bring stability, the Bank of England and other central banks have announced new short term loans to the banking sector worth tens of billions of dollars.

We reported on the latest developments in the US and the UK.

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Bradford and Bingley Branch
Credit ratings agencies have downgraded B&B's creditworthiness

Bradford and Bingley

Shares in the smallest independent High St bank, Bradford & Bingley, which were 4 just over a year ago ended Friday at just 20p.

That raised real fears among analysts about the bank's future, with a takeover or rescue likely sooner rather than later.

We were joined by Ray Boulger of mortgage brokers John Charcol who worked within Bradford & Bingle for four years.

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Post Office sign
Some Post Office savings accounts are linked to Bank of Ireland

Savings protection

There's welcome news for people with savings in Irish banks this week.

The Irish government has raised the sum guaranteed to savers putting money into Irish banks to one hundred thousand euros. That's around seventy nine thousand pounds at today's exchange rate.

People living in the UK and putting money into certain Irish linked accounts, like those run by Anglo Irish bank and most of those by Post Office Savings, which are run by Bank of Ireland, now have much more savings money protected.

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Five, ten and twenty pound notes
Home credit lenders are licensed by the Office of Fair Trading

Home credit

As the credit crunch is making it harder for people on low incomes to borrow money, this week sees the launch of a new comparison website aimed at helping those who choose to take out so-called doorstep loans.

Such products involve customers repaying small sums on a weekly basis to a collector who comes to their home. But the annual percentage rates charged on the loans are hefty.

The comparison website, lenderscompared.org.uk, has been set up by the home loan credit companies at the insistence of the Competition Commission which wants to drive the cost of credit in the industry down.

Moneybox talked to Damon Gibbons from the campaign group 'debt on our doorstep'.

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A meeting of shared appreciation mortgage customers
SAFE members want a fair solution for customers

Shared appreciation mortgages

People who bought shared appreciation mortgages may be able to challenge their mortgage contracts under consumer credit law.

In the late nineties shared appreciation mortgage customers borrowed 25% of the value of their home but promised the bank 75% of the rise in value if they sold the property. The result is they cannot afford to move.

Now the campaigning organisation Struggle Against Financial Exploitation (SAFE) says it has a legal opinion that the contracts customers took out with Bank of Scotland and Barclays can be challenged in the courts.

SAFE are asking customers to pay 5000 each to fund the court action, but is that a good idea when class actions of this sort have a low record of success?

We talked to Elaine Williams from SAFE.

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Money Box listener Julia
Postgraduate student Julia will pay 12.9% interest on her loan

Career development loans

If you need money to pay for a degree course, the obvious route is to apply for a student loan.

But for graduates who want to continue studying, the funding options are limited and potentially more expensive.

Career Development Loans are one option, supported by the government and financed by the banks.

But with many graduates already heavily in debt, are these loans the best way of funding post graduate study?

Bob Howard reported.

Further information/related stories:


BBC Radio 4's Money Box was broadcast on Saturday, 27 September 2008 at 1204 BST.



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26 Sep 08 |  Moneybox


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