Spread of banking panic forces (UK)

[katty]

more: http://www.guardian.co.uk/frontpage/story/0,,2171546,00.html

The government last night issued an emergency pledge to Northern Rock savers that their money is safe, after a third day of queues outside branches threatened to spread across the banking system.

Northern Rock's shares shed a third of their value yesterday and the sense of crisis heightened as shares in rival mortgage lenders dropped sharply - Alliance & Leicester by a third and Bradford & Bingley by 15%. The falls raised fears that the contagion from Northern Rock was starting to spread through the financial system.

[Deja Q]

1. And their panic will only upset the system more.

I'd say, "Please don't panic." :)

[katty]

2. agree--it's like a virus

[fasttense]

3. What would happen if you did not have access to your money for a week?

I've been going over and over this. If a bank closure came at the wrong time, I could fall behind in my house payments and they would foreclose on my house in a heartbeat. Could this happen to US banks? The government and Wall Street wants us to believe everything is fine and dandy here in the US. But, I really am worried.

I keep most of my money in a Credit Union and I am unable to determined if they keep reserves sufficient to cover outstanding loans or if they played the let investors finance our loans game like most of the banks have.

Even if the government insures most the deposits, wont it take a while for the government to pay all they insure? In the meantime, I'll have bills coming due and creditors don't like to wait.

[katty]

4. I've got enough cash stored where I live for a bit of time

[katty]

5. let's hope the $ is worth something for those hanging onto cash!

[bpeale]

6. this is when the depression started

in the u.s. in the 30's. we all should be watching this closely. to me this is very scary indeed.