Northern Rock Panic

[JohnLIreland]

If the Northern Rock has now been backed by the Bank of England, so both savers and lenders are secured, why are people still panicking?

[kwicky]

There have been so many scandals over the past decade include the Equitable Life saga where people have had their hands burnt together with the standing of policians at such a low ebb during the Blair years that confidence in the money system has collapsed. The Bank of England is supposed to be independent but as we have witnessed the government still controls the purse strings. Add this to the herd instinct and people like lemmings start jumping off the cliffs.

[PaulYukochan]

The company made serious mistakes, so it is only natural for investors to scale back their exposure to it. Injecting cash is not the same as changes practices. It may be a good time to buy.