Banking Crisis

At the start of the financial crisis banks are doing their best to save their institution from closure. Northern Rock and Bradford & Bingley collapses, while the Cheshire and Derbyshire Building Societies was rescued. These are some of the scenario seen in UK during the declaration of recession. Credit around the world has been frozen and banks are into real possibility of a meltdown of the financial system. People are panicking because they are concerned about their money invested in the bank.

The good thing is that in UK savings are protected up to £50,000 per bank. It means that if a person has £150,000 in savings, divided equally in three banks then the government guaranteed that he will get the total amount of his money. However, savers are still panicking because they really wanted to make sure that their savings are as trouble free as possible. Others have withdrawn their money because they are afraid that if recession continues they will not be able to get their money back. This is not a good move since it will only add on the difficulties that the banks are experiencing. But the government is optimistic they believe that all major UK banks are strong enough to overcome the current crisis. HSBC is considered among the major banks that were able to overcome the crisis or not affected at all. The reason is that HSBC is a registered UK bank but the transaction focuses on the Asian trade which according to some expert is not affected by the recession.