Dear Listener,

Northern Rock continues to dominate the news. And so it should. It is the first
run on a bank since Overend, Gurney and Co. collapsed on 11 May 1866 owing £11
million – say £900 million today. The Times said the panic in the City “was
almost indescribable. There has probably been nothing like it within living
memory.”

That collapse 141 years ago changed the Bank of England forever. But will
Northern Rock do the same? The Bank’s Governor Mervyn King was summoned to
defend his decisions over Northern Rock – do nothing, do something, do a bit
more – to one of the most feared group of MPs, the Treasury Select Committee.
We hear how he did and if his job is safe. And if the way banks are regulated
will have to change.

We will be looking at the guarantee given by the Treasury that money in
Northern Rock is safe, honest. What exactly is covered? And until when? We’ll
also unpick the promise made by Northern Rock that if you put money you took
out in a panic back into your account the bank will refund any charges.

Of course, these problems do not affect just Northern Rock customers. We ask an
economist what effect it will have on the economy as a whole? Where are
interest rates going? And will growing caution mean house prices begin to fall?

One reason Northern Rock customers queued around the block was that they knew
the compensation scheme only covered some of their money – a maximum of £31,700
if you had £35,000 or more saved up there. Now there are calls for this scheme
to be changed – and for once they might be heeded. We hear what changes the
consumer representatives want the Financial Services Authority to put in place.

Away from the financial crisis (I know I said that last week – see apology
below!) we hope to bring you a live debate on the question – does Buy-to-Let
push house prices out of the reach of many first time buyers?

I hope it doesn’t don’t get squeezed out by the fast moving world of financial
crises – already one planned story (on best savings deals) is going to be web
only. And I do apologise for the fact that last week we had to drop entirely
the story I promised you about the big changes planned in the way that you get
someone to look after your affairs when you can no longer do it yourself.
However, you can follow that story on last Monday’s Money Box Live (17
September) which was devoted to powers of attorney and the changes that begin
on 1 October. You can read a full transcript of the programme or listen again
here: http://news.bbc.co.uk/1/hi/programmes/moneybox/6991691.stm or download
the programme here www.bbc.co.uk/radio/podcasts/moneybox.

Money Box and Money Box Live can both be downloaded so you can listen to them
anytime, anywhere. And you can sign up for a weekly download to make sure you
never miss an episode.

Must go, scripts to write….

Best wishes

Paul Lewis

PS Don’t forget the live preview of Money Box on Saturday on BBC1 Breakfast
between 8.45 and 9.

 

e-mail Paul Lewis