Is it possible for a Bank to go down and close without warning?

Question

People's wages and Pensions go directly into a bank account and if it were to go down suddenly while I am on Holiday --where do I stand ? I ask because I hear that this is possible but unlikely because the Government will step in .Is that a fact ? It took an awful long time with Northern Rock for anyone to act.

Answer 1

It can, but it would be near impossible. People got p!ssed because the Goverment interfen'd on the Nothern Rock issue. Usually the Bank of England would step in and lend the Bank X amount of money.

Answer 2

Some interesting facts you may wish to know. Banks can borrow(Create) 10 times as much as a loan amount taken out by a borrower. This means that the physical cash a bank carries is 90% less than people have invested so absolutely if things go bad at a bank you and everyone else is screwed. The 90% extra a bank 'owes' was actually never there in the first place. The Government protects you up to £30K anything else you have in the bank is worthless!! Spread your money around and make sure less than £30K is in each bank. Money is created from nothing and you pay interest on said nothing. could you think of a better way to make money than that?

Answer 3

it can, but there is a measure of protection, having said that money expert martin lewis advised that you would only get a percentage of the money back if the business were to fold.  At least that is what i read.

If you are in UK perhaps you watched the programmes Dispatches last night, and it was as they say a complete eye opener. That all the major banks Barclays, HBOS, etc have all reported huge financial losses and that anyone these days is at risk of loss, i am aware of the role of FSA but that won't necessarily do anything if the banks get into serious trouble.

Have at look at Martin Lewis money expert website, its very helpful in all sorts of way.

Answer 4

In the UK the government offers a 100% grauntee on deposits up to £2000. and the 90% of the value of the remaining deposits you hold (this has happened since the Nothern Rock episode). Usually a bank will show some signs of falling and it is normally in times of economic downturns (like the credit crunch). The FSA website is a good place to look if you are worried about your bank. They are a government agency and they offer impartial advice.  But banks do have to ensure that they are financially well through deposits in the Bank of England. Please note that the Bank of England is not required to step in to save a bank, and may only do so if they think the failure of a bank will cause deep financial back lashes.

It is best to ensure your bank is financially sound by 1, checking on the FSA website and you can even ask your manager. It is your right to know. However most high street banks like HSBC Barclays Natwest RBS and so on are international banks which spread their risks and are pretty stable so there is no need to worry.