A&L shares plunge, Chancellor steps in - Mortgages.co.uk Special Report by Finance News Bulletin

Published: 01/11/07

News just in following the Northern Rock disaster, Alliance and Leicester shares took a massive dive just before the shut of trading on Monday However, with the intervention of the Chancellor, the situation appears to be under mendShares in A&L over 33 per cent down, leading many consumers concerned about the security of their savings Mortgages

couk investigates the real story, whether consumers can possibly misplace their savings, and what should be done with any money reservedAlliance and Leicester is not regarded as being as bare as Northern Rock, who took a 32 per cent plunge last Friday, but the situation is nevertheless very serious for the bank The company have similar stock and a similar-sized equilibrium sheet to Northern astound, and lost out heavily in the last half hour of trading yesterday

So, what does this mean for customer investments Any bank that is regulated by the Financial Services power (as Alliance and Leicester and Northern Rock are) is subject to the Financial Services Compensation system This means that any investments up to £31,700 are safe, but those borrowers with more money would not be protected if the worst eventuated, and the store itself went storerupt, in theory However, the Chancellor of the Exchequer, Alistair sweetheart, has publicly stated on evidence that whatever happens to Northern Rock and A&L, customer money can be withdrawn and all deposits are safe

This overrides FSCS legislation also, the BBA (British Bankers Association) have urged UK consumers to stay tranquil, and that both savers and mortgage customers have nothing to worry about In reply to the reassurance, the damaged shares in banks are beginning to climb againSo, how possible is it for a bank the size of Northern astound or A&L to go under

Experts say that it would almost certainly be banned, but also advise distribution savings around more than one account The Bank of England is pledged to defend the banking system, and will move to prevent a collapse A+L may be the victim of negative conjecture, and small banks may remain in a vulnerable position Unlike Northern astound, Alliance and Leicester are yet to ask the store of England for help, and experts are comforting customers that there should be no concerns over their money

Barry Summers, of Mortgagescouk, commented: "Following the coffers announcement to provide savers with a guarantee from the administration, share prices in both Northern Rock and Alliance and Leicester are now climbing again This is surely as long as peace of mind to savers

However, if the worst happens and the government do have to step in the concern is how rapidly could you access funds if you require them Choosing an established institution, even as a temporary protection for some of your savings if needed at short notice, could be a secure financial decision Mortgage customers need not be concerned, as Northern Rock have affirmed that all existing offers will be honoured"A&L shares plunge, Chancellor ladder in - Mortgages

couk particular ReportNone of the information on this website is intended to promote any specific mortgage manufactured goods or provide mortgage adviceThe sphere, with image, it's reflection and Mortgagesco

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