UK Northern Rock customers Advised - 'Be Calm'

The British Bankers Association (BBA) has provided a new statement to help reduce concern among Northern Rock customers that the bank is moving towards insolvency.

The statement says "The Northern Rock is a sound and safe bank and there is absolutely no reason for either mortgage customers or savers to worry,"

Over £2 billion has been withdrawn by savers from their accounts as news of emergency funds being provided by the Bank of England created panic.

Many people waited outside Northern Rock branches on Friday and Saturday and the online bank service repeatedly crashed due to high traffic volume.

Bank analysts assure us that the bank is solvent and can operate normally solely on the emergency funding.

The problem comes from poor liquidity, a result of the fact that Northern Rock's assets are invested UK mortgage loans which have recently become very difficult to securitize (or in fact resell). This comes from the currently poor global credit markets.

The BBA stated "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."

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