Saturday, September 15, 2007

Financial Woes Spread - Run on British Bank

Branches of Northern Rock were besieged by savers yesterday as fears grew in the City that the Bank of England rescue package for Britain's fifth-biggest mortgage lender could herald a slide in house prices and further financial collapses.

Amid news that property prices were already falling sharply before the Bank's first use of its lender-of-last-resort facility in more than 30 years, the Newcastle-based Northern Rock was forced to keep branches open late to allow savers access to their money. By last night it was reported a total of £1bn had been withdrawn.
More - Online savers struggle to access Northern Rock accounts
As thousands of customers queued up outside branches in a bid to get their money, many more were trying to log on to Northern Rock's website - some as early as 5am - in a desperate bid to retrieve their savings.

As soon as news of the bank's problem broke last night, customers with E-savings - accounts that pay higher interest rates but can only be accessed online - were trying to log on to withdraw their money.
ADDED - American Home Mortgage checks bouncing in Baltimore.

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