UK Banks were just 3 Hours from Collapse

From the Daily Mail (UK) comes this story about a massive UK bank run last year that was narrowly averted…

‘There were two or three hours when things felt very bad, nervous and fragile,’ he said. ‘Major depositors were trying to withdraw – and willing to pay penalties for early withdrawal – from a number of large banks.’

Lord Myners: ‘There were two or three hours when things felt very bad, nervous and fragile’

The threat to the system was so severe that the Bank of England was forced to contact RBS’s creditors in New York and Tokyo to persuade them not to withdraw their funds, but it is not known which other banks faced a run on their reserves.

‘We faced the very real problem of how banks could stop depositors from withdrawing their money,’ a Treasury source said yesterday.

‘The banks themselves were selling their shareholdings, accelerating the stock-market falls, and preparing to shut up shop. Mortgages would have been sold on and savers would have been spooked, to put it mildly. It would have been chaos.’

…and now that the word of this is out, depositors will likely become more skittish…

She added: ‘If it was panning out in that way, then the Government would have had no choice but to step in and nationalise the entire financial system.’

…not that it won’t all end up that way anyway!