after government cites its full backing... http://news.bbc.co.uk/1/hi/business/6999615.stm I wonder how this works - it is probably valid only for those people who had deposits in NRK before today. Otherwise everybody would deposit their money in NRK as it becomes the safest place.
this should stabilize the situation. NRK is likely dead anyway - the question is how well it can sell itself - likely to somebody who wants a bigger share of UK mortgage market. disclosure: I own some.
Merv King, the govenor of the BOE, was talking about moral hazard in a speech last wednesday. Guess people decided to take less risk!
it is more complicated I think - this guarantee has nothing to do with BOE. In fact it is very much a political gesture from Labour govt. The reason I believe is that a lot of influential people have their hands dirty so the best way to play cards is to play them safe (and possibly for taxpayer's money)
It's no wonder UK depositers are nervous. According to the arcticle, their deposit is only insured for £2,000. In the USA, depositors are insured for $100,000. I be nervous too with such a small insurance amount. Your retirement funds can be practically wiped out.