Once news has broken, it becomes an avalanche.
Jerome Kerviel loses €5 billion … 7,000 news items later and it’s old news.
Credit Suisse panned over an unexpected $2.85 billion write-down … 2,000 new items later and it’s old news.
Northern Rock goes down the toilet, can’t find a buyer and is nationalised … yep, old news.
only thing is that sometimes old news has a twist. In the case of
Northern Rock, it’s the question few have asked: where did all their
You know, those long queues,
hundreds of Brits desperate to get their money out of the ailing bank,
the first bank run in a century* … where did all the customers go?
tomorrow night you can find out if you’re in London. Stuart Bernau,
Executive Director for Retail Distribution at the Nationwide Building
Society is presenting to the FSClub and I’ve just seen his slides.
2007, the trend was for residential lending to increase, up 77%, and
retail deposits to decrease, down 29%. This was until mid-2007 when UK
consumers were still spending like crazy and saving nothing.
the second half of 2007 hit, with borrowing levels being squeezed and
Northern Rock going belly up and guess what? Nationwide’s lending
levels dived down 39% whilst deposits went through the roof, up 96%.
Apparently, all the Northern Rock disaffected savers were leaving the
bank to walk across the Nationwide branches to open accounts.
meant huge volumes of new account openings and a massive cash
injection of £4.1 billion. It’ll be interesting to see what strain
that puts on people, processes and systems for account openings. Come along if you’re interested.
* actually, the last run on a UK bank was in 1991 when Town &
Country Building Society wobbled and was rescued by the Woolwich in