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Spooked savers empty bank accounts

  • Story Highlights
  • Savers at leading UK mortgage bank lined up to empty their accounts
  • Northern Rock was bailed out by the Bank of England a day earlier
  • Reassurances that banks was safe have gone unheeded by many
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LONDON, England -- Savers at a leading UK mortgage bank lined up for a second day to empty their accounts Saturday, a day after the lender was bailed out by the Bank of England after heavily slashing profit forecasts.

Fearful customers line up to withdraw cash from a Northern Rock branch in southeast London on Friday.

Long lines formed before counters opened at the Northern Rock building society, one of the UK's top five lenders, as worried customers ignored reassurances from the bank and the government.

Customers are believed to have already withdrawn about £1 billion ($2 billion) since the bank's woes were revealed, prompting speculation that the global credit crunch made raising funds through commercial borrowing difficult.

Shares in Northern Rock dropped up to 30 percent in Friday trading, with problems spilling over the European banking sector

The British Bankers' Association has urged customers to "calm down," according to the UK Press Association.

It said: "Northern Rock is a sound and safe bank and there is absolutely no reason for either mortgage customers or savers to worry."

Meanwhile, finance minister Alistair Darling said the Bank of England had stepped in "to create a stable banking system".


He said: "People can use their accounts in the usual way, they can carry on making their mortgage payments in the usual way. Northern Rock will be able to carry on its business."

Northern Rock chief executive Adam Applegarth said yesterday that the bank had yet to draw on the emergency cash, which he called "a backdrop in case we need to use it", according to PA. E-mail to a friend E-mail to a friend

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