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Northern Rock ready for more withdrawals

Northern Rock branch in Newcastle
Date 17 Sep 2007

Northern Rock branch in Newcastle

More anxious savers are emptying their accounts at North East-based bank Northern Rock today despite calls for calm and for rival banks to step in and make a rescue takeover bid. On Friday, shares in the bank fell by more than 30% and plunged again within moments of the stock market opening.

Branches across the UK have opened early and are closing late to deal with the long queues of people worried about their cash. The two-day run on the bank on Friday and Saturday saw as much as £2bn drained from accounts. In anticipation of further withdrawals today, doors at Northern Rock are opened at 8am and will close at 6pm - extending the working day by two hours. The bank also reiterated that online customers could still carry out transactions, but the volume of traffic may slow down the procedure.

Attempts to find a buyer for the Northern Rock received a boost when the Bank of England confirmed its emergency loan would be available after any sale. The Bank said it had been agreed that a successful bidder would be able to use the facility for the rest of its existing term, but declined to say how long that would be. HSBC and HBOS are among the names being discussed by market watchers as potential suitors.

Throughout the weekend, the chief financial watchdog and the Government sought to reassure people that their money was safe.

Callum McCarthy, the chairman of the Financial Services Authority, said: "To be absolutely clear, if we believed that Northern Rock was not solvent, we would not have allowed it to remain open for business."

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