Northern Rock Hits Banking Stocks: Alliance & Leicester, HBOS, Bradford & Bingley

The mortgage crisis shows no signs of slowing down as Northern Rock saw its stock price plunge 30% today.

The British government has said that it will guarantee all customer deposits in Northern Rock in a desperate bid to end this financial crisis.

The British Chancellor, Alistair Darling, made an announcement about the Northern Rock mortgage crisis saying:

“Should it be necessary, we would put in place arrangements that would guarantee all the existing deposits in Northern Rock.”

” It is now clear beyond any doubt that all savings in Northern Rock are safe and secure”.

“Consequently, anybody who is in a queue outside a branch, or who is trying to access an online account can be fully reassured that there is no cause for concern whatsoever”.

The stock price crash in Northern Rock has dragged other banking stocks down into the abyss with it, such as Alliance & Leicester, HBOS and Bradford & Bingley.

Market analyst Sam Kirtley of The Gold Prices Newsletter said that this may only be the beginning:

“Expect to see some light relief if the Fed cut interest rates tomorrow, but this credit and real estate crisis is far from over. The US is approaching a massive recession and investors should be getting their cash into gold and gold stocks to protect themselves from this financial turmoil, which is going to get a lot worse before it gets better.”

Various attempts are being made to find a buyer for Northern Rock, and these efforts were given a boost when the Bank of England gave emergency financing to Northern Rock.

How can investors protect themselves from this financial crisis, is gold the way to go?

Do you think the government should intervening with Northern Rock?

Source

CLICK HERE to keep updated with the latest news, share a comment or problems with products and services. Follow us on twitter or read more news.