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Author: strelna Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1202  
Subject: Re: $24b of Northern Rock Deposits Date: 10/5/2007 5:56 AM
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This is an interesting question. I had a fairly large deposit with Anglo Irish Bank, one of the best-run banks in Europe. Nevertheless, I withdrew my deposit, on the grounds that, at that time, a full-scale run on UK banks, however unlikely, could not be completely ruled out. Shares in Anglo Irish were falling heavily, there were no guarantees on deposit protection from Ireland and it is a relatively small bank. (Paradoxically, at precisely the same time, I was buying shares in Anglo Irish.) Now to the point: above all, I was looking for security. Interest, once the primary factor, had become secondary. I put my money in HSBC, one of the worst-run banks in the world, but of a size which... well if HSBC went down, we were all lost. In doing so, I forfeited 0.5% interest, a large amount. I therefore believe that most of the money from Northern Rock will have behaved similarly, thus, in the UK, larger sums will have gone to Royal Bank of Scotland or HSBC. Smaller sums will have gone to low interest government-backed securities, cash unit trusts or building societies.
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