UK Government guaranteees Northern Rock funds

The transcript discusses the financial instability surrounding Northern Rock, with the Chancellor and the Bank of England offering reassurances to depositors. The government guarantees all existing deposits, aiming to prevent a broader banking crisis. Despite these measures, Northern Rock's share price plummeted, affecting other banks like Alliance and Leicester. The transcript highlights the importance of public confidence in the banking system and the government's role in maintaining stability.

What was the main promise made by the government regarding Northern Rock deposits?

• To close down Northern Rock

• To guarantee all existing deposits during the financial instability

• To increase interest rates on savings

• To merge Northern Rock with another bank

What was the purpose of the government's intervention according to Northern Rock's chief executive?

• To ensure the stability of the overall banking system

• To increase Northern Rock's market share

• To save Northern Rock at all costs

• To reduce the number of bank branches

What was the immediate effect on Northern Rock's share price following the government's announcement?

• It increased by 35%

• It remained stable

• It plummeted by 35%

• It doubled in value

How did the share prices of Alliance and Leicester, and Bradford and Bingley react?

• They increased significantly

• They were unaffected

• They dropped similarly to Northern Rock

• They rose slightly

What financial strategy did HSBC have compared to Northern Rock?

• HSBC had no loans

• HSBC had more deposits than loans

• HSBC had a balanced amount of loans and deposits

• HSBC had more loans than deposits