? ?
WORLD / Europe
Fears spread among UK bank's customers
(Agencies)
Updated: 2007-09-16 09:32
LONDON - Hundreds of customers lined up to withdraw their savings from a
British mortgage bank Saturday, ignoring government assurances that their
money was safe despite the bank's request for an emergency loan.
Hundreds of Northern Rock bank customers queue outside the Leeds Branch,
England, Saturday, Sept. 15, 2007. Customers lined up outside branches of
the British mortgage bank for a second day on Saturday as fears spread
over the bank's emergency loan from the Bank of England amid global
financial turmoil.? [AP]
Police were called in some cities to steer panicked crowds away as
Northern Rock bank branches closed for the day.
Fears have spread over the bank's request earlier in the week for an
emergency Bank of England loan amid the global credit crisis. Northern
Rock, Britain's fifth-largest mortgage lender, is the first British bank
in 15 years to be bailed out by regulators.
Customers withdrew $2 billion from the bank Friday, The Financial Times
reported, citing an unidentified person described as close to the
situation. The bank declined to confirm the figure, which represents 4
percent of its deposit base.
Treasury chief Alistair Darling and the country's Financial Service
Authority tried to assure customers there was no doubt over Northern
Rock's solvency.
The authority "has reiterated yet again tonight that it is satisfied that
Northern Rock is solvent, can carry on doing business and, crucially,
paying out money if people want to withdraw their funds," Darling said on
Channel 4 TV on Saturday night.
But The Sunday Telegraph said Northern Rock was preparing itself for a
sell-off. Quoting unidentified sources, the paper said one plan would
divide the bank's mortgage portfolio between other major banks in what
would be a private-sector rescue of the lender.
The bank made the loan request Thursday because it relies heavily on
wholesale money markets for cash, and had been unable to borrow the
amounts it required from other banks since the money markets choked up
last month. That was caused in part by US banks making mortgage loans to
Americans with poor credit histories.
Although Northern Rock requested substantial emergency funds at a penalty
rate, the bank has said it had billions of pounds in cash at its
disposal. It has yet to draw on any emergency funding.
Despite Darling's message, lines stretched around the block Saturday at
some of the bank's 76 branches in Britain and the bank extended opening
hours to deal with the situation.
"Yes, we are making matters worse, but I do think people need some
reassurance from Northern Rock and the government and financial services
that their money is safe," account holder Jane Taylor told Sky News while
waiting outside a branch in Kingston-upon-Thames, west of London.
But others said they had faith in the bank and financial authorities and
watched the lines in disbelief.
"It's mostly, in my opinion, ignorance and that's why they're panicking,"
said another bank customer who gave only his first name, Tom. "I'm
leaving mine there."
Under Financial Services Compensation Scheme, deposits of up to $63,900
are guaranteed should a bank default.
Ron Stout, a spokesman for Northern Rock, told The Associated Press that
reckless comments by some analysts about the bank's solvency prompted
customers to panic and line up outside branches or strain the company's
online banking system.
He said Northern Rock would continue to extend its banking hours, by
opening one hour ahead of schedule on Monday, and to reassure customers
that their investments are safe with the bank.
Top World News ?
* More than 190 arrested at D.C. protest
* Fukuda leads Japan PM race, won't visit Yasukuni
* Sadrist group quits ruling Shiite parliament bloc
* Iraq: Revenge sought in sheik's death
* Bush approves gradual troop cuts in Iraq
Today's Top News ?
* US taken to WTO over paper dispute
* Fukuda says he won't visit Yasukuni
* Family planning rules tightened
* Fears spread among UK depositors
* China confident of derailing Brazil
Most Commented/Read Stories in 48 Hours
Learn Chinese, Chinese School, Learning Materials, Mandarin audio lessons, Chinese writing lessons, Chinese vocabulary lists, About chinese characters, News in Chinese, Go to China, Travel to China, Study in China, Teach in China, Dictionaries, Learn Chinese Painting, Your name in Chinese, Chinese calligraphy, Chinese songs, Chinese proverbs, Chinese poetry, Chinese tattoo, Beijing 2008 Olympics, Mandarin Phrasebook, Chinese editor, Pinyin editor, China Travel, Travel to Beijing, Travel to Tibet
No comments:
Post a Comment