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Bank customers urged not to panic

Northern Rock says their money is safe

Customers queued outside branches of Northern Rock yesterday in a rush to withdraw their money from the troubled bank despite being urged not to panic.

Savers said they were concerned for their investments following the news that the company had called on the Bank of England to help it through the crisis.

The Newcastle-based group’s chief executive Adam Applegarth said the Bank of England’s support “reflected a recognition that Northern Rock is solvent”.

And commentators stressed that savers should not panic and move their money elsewhere.

Council of Mortgage Lenders director general Michael Coogan said: ‘Consumers need to understand that the problem for lenders generally at the moment is in raising funds, not in lending quality.’

A Northern Rock spokesman said: ‘Savings customers’ deposits are safe. Our relationships with our customers are of paramount importance to us and there will be no changes to their accounts or the service we will provide.

‘There will be no impact on our borrowers. Operationally, the company remains in good shape and the fundamental strengths of the business and brand remain unchanged.’

Mortgage customers

The British Bankers’ Association said: ‘The Northern Rock is a sound and safe bank and there is absolutely no reason for either mortgage customers or savers to worry.

‘All the announcement from the Bank of England, Treasury and the Financial Services Authority means is that the Northern Rock has had to make alternative arrangements to meet its normal everyday short-term borrowing requirements.

‘The British banking system is carefully regulated and overseen which ensures that all banks operate safely and prudently in the interest of their customers.

‘Everyone should calm down and refrain from making simplistic comments in a very complex area which just cause unnecessary worry and concern.’

Savings products

Which? Money Editor Martyn Hocking said: ‘The sight of consumers queuing to withdraw money from branches of Northern Rock may look alarming but there is no reason to think that the bank’s difficulties will affect its savers or borrowers in the short term.

‘It is said to have £113bn in assets so appears to be in no danger of going bust.

‘That said, none of its savings products are current Which? Best Buys, so if you have money with the bank you may prefer to move your money elsewhere in due course to get a better deal.’

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