What the run on Northern Rock shows is that the great British public has learned that valuable lesson Bush famously could not remember: shame me once… After Equitable Life, after Fairpak, people have learned not to trust reassurances that everything will be alright, have learned that when things inevitably go bellyup they are the ones left holding the ba and have learned not to trust the government to bail them out. So instead they all decide to withdraw their funds while they still can. In the process it seems they have forced the government to provide a proper bailout if Northern Rock does go bellyup, since it’s now guaranteeing a hundred percent compensation scheme.
I love it when a plan comes together.
bjacques
September 18, 2007 at 10:58 amBank runs are so mediagenic. And I bet they didn’t leave enough in their accounts to pay the maintenance fees!
Palau
September 19, 2007 at 2:53 amI just heard oin the eadio news that not only the Metropolitan police, but the Fire Service and Ken Livingstone’s London Assembly have loaned Northern Rock up to 15 million quid each over this past week… w millions hich are no underwritten by the treasury and guaranteed by Gordon Brown.
So the bank rescue wasn’t about rescuing savers at all, it was about heading off a shower of shit (right around the time of the party conference, when Brown plans to get rid of the unions’ votes on party policy) that would’ve come from the public service unions when they realised that their pension money was going down the tubes.
Scratch one layer of Ne Labour cynicism and there’s another underneath.