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	<title>Comments on: Northern Rock - &#8216;Now, about that Bank guarantee&#8230;&#8217;</title>
	<link>http://ftalphaville.ft.com/blog/2007/09/17/7350/northern-rock-now-about-that-bank-guarantee/</link>
	<description>FT Alphaville from FT.com</description>
	<copyright>Copyright The Financial Times Ltd 2006. "Alphaville", "FT" and "Financial Times" are trademarks of the Financial Times.</copyright>
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	<pubDate>Wed, 20 Aug 2008 21:10:52 +0000</pubDate>
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		<title>by: Selling Northern Rock : Interactive Investor Blog</title>
		<link>http://ftalphaville.ft.com/blog/2007/09/17/7350/northern-rock-now-about-that-bank-guarantee/#comment-6332</link>
		<pubDate>Mon, 17 Sep 2007 11:30:36 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2007/09/17/7350/northern-rock-now-about-that-bank-guarantee/#comment-6332</guid>
					<description><![CDATA[[...] Alphaville says Northern Rock’s update on 20 August, when it reassured investors that it had minimal exposure to the US subprime meltdown, was “utterly misleading“, because it didn’t go any further. The FT’s blog would have preferred a more genuine communication: While we have minimal direct exposure to US subprime, contamination of the wider credit market has exposed a deep structural flaw in our business model. A buyer is being sought for the bank with some haste. Merrill Lynch is on the case. [...]]]></description>
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		<title>by: Eric Jansson</title>
		<link>http://ftalphaville.ft.com/blog/2007/09/17/7350/northern-rock-now-about-that-bank-guarantee/#comment-6297</link>
		<pubDate>Mon, 17 Sep 2007 09:16:39 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2007/09/17/7350/northern-rock-now-about-that-bank-guarantee/#comment-6297</guid>
					<description><![CDATA[Another angle to look at: how depositors are reacting to the Bank's guarantee.

Alistair Darling went on Radio 4 this morning, restating the fact that depositors can feel safe about their funds, because of the Bank's guarantee. He stated specifically that the guarantee ensured that there would be money to withdraw should more people choose to do so.

Darling's message, for many people who think like bankers, indicates that there is no need to withdraw. However, for people who think like depositors in a highly competitive market, it means 'why not withdraw?'

Here is another example of behaviour unforeseen by policymakers, stemming from root changes in the relationship between private individuals and the public institutions policymakers inhabit.

Add to this the lack of customer loyalty exhibited among depositors whose relationship with Northern Rock existed soley in cyberspace, and this looks more and more like Britain's first post-modern bank run.

http://eric-jansson.blogspot.com]]></description>
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