Comments on: Between a Northern Rock and a hard place http://oconallstreet.com/2007/09/16/between-a-northern-rock-and-a-hard-place/ Borderless thoughts on Politics, Public Affairs, the media and anything else that matters from Conall McDevitt, SDLP MLA for South Belfast Sun, 14 Mar 2010 13:54:47 -0600 http://wordpress.org/?v=2.8.3 hourly 1 By: Northern Rock and the future of online banking in Ireland at Piaras Kelly PR - Irish Public Relations http://oconallstreet.com/2007/09/16/between-a-northern-rock-and-a-hard-place/comment-page-1/#comment-35 Northern Rock and the future of online banking in Ireland at Piaras Kelly PR - Irish Public Relations Wed, 03 Oct 2007 17:08:56 +0000 http://oconallstreet.com/2007/09/16/between-a-northern-rock-and-a-hard-place/#comment-35 [...] the pun) following problems in the credit markets caused by the subprime mortgage financial crisis. Conall McDevitt offers some good commentary on the recent news from a reputation management and public relations [...] [...] the pun) following problems in the credit markets caused by the subprime mortgage financial crisis. Conall McDevitt offers some good commentary on the recent news from a reputation management and public relations [...]

]]> By: Tomaltach http://oconallstreet.com/2007/09/16/between-a-northern-rock-and-a-hard-place/comment-page-1/#comment-25 Tomaltach Tue, 18 Sep 2007 10:48:40 +0000 http://oconallstreet.com/2007/09/16/between-a-northern-rock-and-a-hard-place/#comment-25 Unfortunately people have kept on queuing. The trouble is that a business that depends on funds from people's personal savings relies more heavily on confidence than perhaps any other business. You're right I think the NR's ability to get a grip on the PR wasn't up to it, but they were always going to have an exceptionally difficult task. When the trio of the Financial services, BoE gov, and Chancellor weighed in, NR should have seen to it that they were visible in tandem with these heavy-weights. As an aside, I was interested to read that chancellor A. Darling "agreed with B of E on the bailout". Was his agreement necessary? Labour made such a big deal of their freeing the B of E from political interference when they were elected first in 1997. I can see how the gov desparately wants NR not fail, but is the independence now to be read as "yes, but if anything big happens, the gov will get involved". It will be very hard for NR to pick up the pieces. None of those customers who pulled their accounts will come back. And how many potential customers out there have now ruled out NR for the future. Probably the bank will not survive as an independent entity. Perhaps that is good. If their business model (far more heavily relient on money markets than savers deposits for loans than other mortgage lenders) is so vulnerable to credit crunches then perhaps this is a useful lesson. I don't understand banking well enough to say how much the other big players in the mortgage or commercial loan game are also vulnerable under the present circumstances. If they are, then surely if this crises deepens, central banks cannot bail everyone out! Unfortunately people have kept on queuing. The trouble is that a business that depends on funds from people’s personal savings relies more heavily on confidence than perhaps any other business. You’re right I think the NR’s ability to get a grip on the PR wasn’t up to it, but they were always going to have an exceptionally difficult task. When the trio of the Financial services, BoE gov, and Chancellor weighed in, NR should have seen to it that they were visible in tandem with these heavy-weights.

As an aside, I was interested to read that chancellor A. Darling “agreed with B of E on the bailout”. Was his agreement necessary? Labour made such a big deal of their freeing the B of E from political interference when they were elected first in 1997. I can see how the gov desparately wants NR not fail, but is the independence now to be read as “yes, but if anything big happens, the gov will get involved”.

It will be very hard for NR to pick up the pieces. None of those customers who pulled their accounts will come back. And how many potential customers out there have now ruled out NR for the future. Probably the bank will not survive as an independent entity. Perhaps that is good. If their business model (far more heavily relient on money markets than savers deposits for loans than other mortgage lenders) is so vulnerable to credit crunches then perhaps this is a useful lesson.

I don’t understand banking well enough to say how much the other big players in the mortgage or commercial loan game are also vulnerable under the present circumstances. If they are, then surely if this crises deepens, central banks cannot bail everyone out!

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