Northern Virgin (or Virgin Rock?)

[RichardMannion]

Originally posted by pjh

Originally posted by RichardMannion
Companies fail every day, and there is no government assistance there. BCCI anyone?

I don't recall middle england being queued up outside BCCI branches withdrawing their cash, nor a media having tons'o'fun running 'is it YOUR bank next ?!' stories and hoping for photogenic queues outside the local Barclays, Lloyds et al. NR had the potential to get very ugly very quickly for the entire banking structure and the entire cashless payment infrastructure.

Paul

True, but then 'middle' England must be believing everything they read in the paper. What makes NR so special? They got themselves in this situation because of their business model, so there are 2 elements at play here:

a) customers not understanding the risks of the model
b) Other banks have taken multi-billion writedowns but aren't borrowing from the state.

I don't understand the context around you last statement though; if NR were to throw in the towel, how would that affect other banks? Many of the customers have done the run on the bank and moved their moeny elsewhere (so other banks gain new customers); and there are the other banks that have made sizeable amounts betting on the NR share price.

Originally posted by RichardMannion
I don't understand the context around you last statement though; if NR were to throw in the towel, how would that affect other banks? Many of the customers have done the run on the bank and moved their moeny elsewhere (so other banks gain new customers); and there are the other banks that have made sizeable amounts betting on the NR share price.

Only that the loss of faith in a single institution could, with the way it was being played in the media, have become a loss of faith in the banking system as a whole. A resulting significant shift back to cash could produce some significant strains on business generally; as well as withdrawing a raft of money that's used for investment in businesses, many businesses are built and costed on cashless models.

Paul