Posted on 09/14/2007 7:48:33 AM PDT by blam
Northern Rock customers queue for cash as crisis hits high street
By Emma Thelwell
Last Updated: 3:01pm BST 14/09/2007
The credit crisis spilled onto Britain's high streets today as worried Northern Rock customers queued up to withdraw their savings.
Their fears were prompted by the revelation this morning that Britain's fifth-biggest mortgage lender had to ask the Bank of England for emergency financial assistance.
Tony Looch: 'I'm taking the lot out'
Despite Northern Rock's assurances that there was no need for customers to panic, queues continued to build steadily at the London branches visited by the Daily Telegraph today.
For 65-year old Tony Looch, with savings of £135,000, the lender's calming words were not enough.
"I'm prepared to wait as long as it takes. I'm taking the lot out, if they'll let me have it," said Mr Looch, who was queuing outside the bank's Moorgate branch, in the heart of the Square Mile.
"I'm absolutely appalled that they should be so badly run and so badly regulated. I thought they were totally reliable and secure - they're supposed to be regulated these companies."
Northern Rock shares had plunged more than 20pc by early afternoon after the lender slashed its profit forecasts and admitted it was seeking help from the central bank.
Based in Newcastle, Northern Rock has 76 branches around the UK, has about 1.4m savers, around 800,000 mortgage customers and retail deposits of £24bn.
Earlier in the day, Adam Applegarth, the company's chief executive, sought to calm the nerves of customers and shareholders alike: "In these extreme times we are pleased to have a high quality asset based and remain confident in the excellence of our strong customer franchise, our efficient business platform and our well-known brand."
However, the words appeared to carry little weight with the more than 200 people lining up outside Northern Rock's branch in Kingston, Surrey.
One pensioner, who did not want to be named, told The Daily Telegraph: "I am 65 and my husband is 72. We are queuing because we have substantial amounts of money invested in Individual Savings Accounts with Northern Rock.
"They say don't panic but it will be too late if things go wrong. I know that you need to keep level headed about these things, be we are not youngsters who can afford to lose this money."
Vasily Smirnov, a financial planning advisor from rival bank Abbey in Kingston, was handing out leaflets to Northern Rock customers advertising Abbey's super saving range.
An Abbey spokesman said: "Clearly Abbey staff are taking the initiative and ensuring Northern Rock customers are aware of other highly competitive savings deals."
The US has experienced no runs on banks in the course of the subprime “crisis”, despite the frothings of many anti-capitalist FRINOs.
Of course, now that certain elements know that Tony Looch now has £135,000 hidden under his pillow, and no personal protection, his problems are only about to begin!
I would like to know if this company has any US exposure or whether this “crisis” is purely European.
The Brits don’t have an analog of the FDIC?
Oh well, nothing like a nice run on the bank to start your weekend....
People lined up at Countrywide branches to get money when it looked like bankruptcy was imminent.
It's a run on the building and loan, Uncle Billy.
I've read probably 200-250 articles about Conutrywide in the past month and I've never heard that mentioned. Hast thou links?
The U.S. has Federal Deposit Insurance, for just that reason.
Indeed. Hence my desire for DemEater to corroborate this claim.
“Worried about the stability of mortgage giant Countrywide Financial, depositors crowd branches. In Laguna Niguel, Bill Ashmore drove his Porsche Cayenne to the bank’s office and waited half an hour to cash out $500,000. “It’s got my wife totally freaked out,” he said.”
I think FDIC only covers $200,000 per person. The only time I’ve ever had that much in the bank was a very brief float between buying and selling house.
Does Countrywide even have depositers?
http://money.cnn.tv/2007/08/17/news/companies/countrywide_fdic.reut/index.htm?postversion=2007081719
Here in NYC, there is a line that long at the Citibank branch near my office every day at lunchtime. I can't imagine Los Angeles is much different from NYC in that regard.
Doesn't sound like people lined up all day on the street outside the bank desperate to pull out their life's savings.
We have FDIC insurance, I do not know if the Brits haved something similar.
It actually does. It has its own wholly-owned savings bank.
So, we have a guy in a $110,000 SUV who waited 30 minutes on line at the bank and a bank manager who served coffee to 25 customers waiting to see an available bank employee.
Not much of a run.
I've seen the stories about Countrywide branches in Southern CA - I haven't seen anything about lines a block long, but of lines 40 people long and 25 people long.
Even if 100% of those customers were there to withdraw all their savings, that still ain't much of a bank panic or a run on the bank.
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