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Northern Rock customers show little faith in new assurances
NORTHERN Rock customers in Yorkshire queued from early morning yesterday – insistent they did not trust the Government's words of reassurance.
Many also said they felt no loyalty to the bank which was holding their life savings.
More than 100 people were queuing outside Northern Rock in York with even those arriving shortly after 8am having to wait more than four hours to reach the front of the line.
Some of those waiting had queued up on Saturday but arrived too late to make it inside the branch before it closed for the night.
Some also had brought folding chairs, or books to help to pass the time.
People queuing were split between those reducing their savings and moving the balance elsewhere, and others who were closing their accounts altogether.
Bucking this trend was Clive Hanover, who lives in a village near York.
Holding a sign saying "I'm putting money in", Mr Hanover, who is retired but has a background in finance, said he was opening an account with 10,000 "as a point of principle".
Mr Hanover, who had failed to convince fellow queuers to join him, blamed the Bank of England for the current panic.
He said: "The Bank of England should not have made the stupid statement in the first place that it had put the facility in place for Northern Rock – it should have said it had made funds available in the market place."
In Leeds, around 100 people were queuing outside the Northern Rock on Briggate.
Caroline Clarkson, 39, said she was frustrated by the bank's response to the crisis.
She said: "When you phone them, you can't get through and when you go to the website, it just crashes.
"When you read all the reports over the weekend and you think about your money, I decided it just was not worth the risk."
Another woman said: "I'm looking to take out all the deposits I can and I'm going to put them into another bank; I need the interest as I'm retired."
More than 100 people were lined up outside the Sheffield branch of Northern Rock on Pinstone Street at lunch time while more customers continued to join the back of the queue.
One customer had been waiting more than five hours to see an advisor.
Another customer said she had been waiting four hours and was still only towards the middle of the queue. She said: "Even though the bank is urging customers to be calm, I still want to withdraw my life savings. Everything I've got is in this bank."
In Hull the queue had doubled from Saturday to 200 and suspicion was growing that the bank was using delaying tactics to staunch the haemorrhage of funds.
"Why do we have to fill in forms and why does it take half an hour or more to close one account?" asked one.
Many will be forced to return today as it was taking seven hours to get to the front of the queue. Staff from secretarial recruitment agency Office Angels took pity on people waiting huddled under umbrellas, by handing out cookies – their 100 only covered half the queue – while the YMCA offered tea and coffee. "It's other people who have been very good - not Northern Rock," said one woman.
Not all Northern Rock branches are being besieged by panicked customers intent on draining their savings.
There was no queue outside the bank's Swindon branch. At 10am there were just two customers inside – one of whom was paying cash in, rather than taking it out.
What went wrong...
Long queues continued to form outside branches of Northern Rock yesterday – but what started the panic in the first place?
Q: When did people first start panicking about Northern Rock?
A: Last Thursday Northern Rock agreed emergency funding with the Bank of England. This was followed by a stock market statement the day after in which the group also said its 2007 profits would be more than 100m lower than expected, 500m-540m.
Q: Why did Northern Rock need the money?
A: High levels of defaults on US sub-prime mortgages, lent to people who would be turned down by mainstream banks, have caused volatility in international financial markets – effectively making the wholesale credit market dry up. Northern Rock faced a short-term liquidity problem and turned to the Bank of England as "lender of last resort".
Q: The media is giving this story a lot of coverage. Is this adding to the panic?
A: Media coverage has certainly tended to focus on the worst-case scenario.
Q: The panic seems to be getting worse. What has happened between Friday and now?
A: Nothing. But savers have continued to queue to get their money out of the bank.
Q: I have savings with Northern Rock. Should I be panicking?
A: No, commentators and financial advisers are urging savers not to panic. Northern Rock has a short-term liquidity problem, but the funding from the Bank of England is a vote of confidence.
Q: What will happen to Northern Rock now?
A: Northern Rock has repeatedly stressed it remains solvent. However it does look increasingly likely that the bank could be taken over.
Q: Is there really anything to panic about?
A: No. The problems are currently confined to just one bank, Northern Rock, and it has repeatedly stressed savers are not at any risk of losing their money
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Weather for Yorkshire
Saturday 26 May 2012
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Temperature: 9 C to 21 C
Wind Speed: 17 mph
Wind direction: East
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Temperature: 9 C to 22 C
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