Friday 21 September 2007

Northern Rock vs Barlcays Bank

I've watched with interest, the media frenzy surrounding the Northern Rock's decision to get emergency funding from the Bank of England last week due to a cashflow problem. The reason I've watched with interest is that since the story broke and the media basically decimated the Northern Rock by over coverage of the story and making it sound like they had done something the other banks hadn't done, therefore creating a fear factor in the general public; I spent the whole time yelling at the telly asking why this kind of coverage hadn't been given to Barclays Bank when it TWICE went to the Bank of England in August for emergency funding.

Barclays bank had borrowed £314 million to settle a loan earlier in August and then £1.6 billion later in the month. http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2358155.ece
Now, were Barclays just clever in how they explained away the need for these 2 loans within a month or are they seen to be such a large creditable instituion that the media 'let them off'.

The banks have all announced huge profits in the billions in the last couple of years, have kept interest rates to savers low and spent billions on takeover deals etc. So are they actually any better tahn any 'Joe Blogg's' member of the public who has made money, spent too much and forgotten to keep reserves for a rainy day. No they are not. But it's public money they are all borrowing just now and it is the public who wil pay again at the end of the day by not being allowed the credit facilities to sort their own mess out while the banks just trun cap in hand to the BOE.

Who ever said it was a fair world.