Sunday, September 16, 2007

"Rock can't be sold"

The BBC's Business Editor has been turning up facts I've seen nowhere else.

For all the talk – including by me (see my earlier comment, "Rock or Crock”) – about how Northern Rock must surely soon find itself under new ownership, I have learned that it cannot be taken over by another bank in the absence of a major policy shift by the Bank of England.

Here is why.

Bankers tell me that Northern Rock spent a good deal of the summer exploring whether any big bank was prepared to acquire it lock, stock and online accounts. It had appointed the leading investment bank, Merrill Lynch, to sound out possible buyers.

There was, I am told, interest in a possible deal from substantial international banks.

But – and here’s the important point – the seizing up of interbank markets proved an insuperable obstacle....

More from Robert Peston

The Times had these numbers in:
Northern Rock Q&A

...What about my savings?

All savings should be secure at the moment. But if the bank went bust, only savers with less than £2,000 would get a full refund of their savings from the Financial Services Compensation Scheme (FSCS). The FSCS will refund 90 per cent of the next £33,000 in savings. But that is the limit. Those who have £50,000, £100,000 or even £250,000 in savings are only likely to receive compensation of £31,700.

Kevin Mountford, head of savings at, said: "No matter who your savings are with though, it is always a good idea to have no more than £35,000 with any one bank or building society. Spreading your savings helps protect most of your cash under the Financial Services Compensation Scheme.”

The only savings institution which offers a cast-iron guarantee of the safety of your savings is National Savings & Investments, the government-backed savings institution.