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British government throws lifeline to Northern Rock


British government throws lifeline to Northern Rock


Shares in Northern Rock bank have gained ground after the government pledged to guarantee deposits during the current instability in financial markets.
Fears appear to have calmed somewhat over the bank’s funding problems as the Chancellor of the Exchequer, Alistair Darling reassured customers of the beleagured bank:

“We and the bank of England would put in place arrangements that would guarantee all the existing deposits in the Northern Rock bank during the current instability in the financial markets.
That means that people can continue to take their money out of the Northern Rock bank, as I have said.
But if they choose to leave their money in the Northern Rock bank it will be guaranteed safe and secure.”

Previously most of savings reaching some forty thousand Euros were protected if the bank went bust. But the Chancellor of the Exchequer has now promised the Bank of England will pay out to savers even if they have much more than that invested in Northern Rock.

Not totally convinced that everything is fine,some investors in the troubled bank still went ahead and withdrew their money:

“I know they say that they are very confident but I’m scared, it’s my life savings from my late father. I just didn’t want to get rid of it, so that’s why I’ve done it.”

Besides Northern Rock,other British mortgage lenders have also chalked up gains on the stock markets after coming under pressure amid funding worries in recent days.

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