From: "Virgils Ghost" 
Newsgroups: uk.finance
Subject: Re: Northern Rock CEO - how to win friends and influence people :)
Date: Mon, 24 Sep 2007 10:45:52 GMT
Bytes: 2393


"John Boyle"  wrote in message 
news:FX61jkMLuu9GFwqQ@johnboyle1.demon.co.uk...
> In message , Virgils Ghost 
>  writes
>>"ŽiŠardo"  wrote in message news:M3AIi.144536
>>>
>>> The FSA scheme didn't precipitate anything, it's been in force for a 
>>> great
>>> many years.
>>
>>I agree, it has been window dressing for many years, but when it came down
>>to it in a moment of crisis people examined the terms and realised it was
>>about as good as a chocolate teapot. This inadequate protection did indeed
>>precipitate the run once people realised how useless it was.
>
> If the risk of depositing money is nil, then that should be reflected by 
> the interest rate, i.e. +0% over the risk free rate, which is generally 
> regarded as the redemption yield of government bonds.
>
> If depositors want a higher return then they must accept the associated 
> risk.

You'll find many savers with NR with old accounts were enjoying in excess 
of -2% below the risk free rate.