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Northern Rock moves to reassure savers queuing outside branches

Northern Rock has tried to reassure its customers that their savings are safe while thousands of savers continue to queue at branches to withdraw their savings from the troubled bank.

Northern Rock staff are handing out copies of a letter from the bank to customers in an attempt to explain why they asked the Bank of England to guarantee extra borrowing and re-assure savers that their deposits are safe.

The unsigned statement says: “Whilst we remain caught up in this global market crisis we felt it was responsible to agree an additional funding facility with the Bank of England. This additional source of funding will enable to Northern Rock to manage more effectively the current, extreme market conditions.

“I would like to reassure you that your savings are safe with Northern Rock.”

The letter also includes details of the guarantees for savers under the Financial Services Compensation Scheme, with details of how much compensation customers can expect to get back from the scheme if a bank goes into administration.

The letter echoes a statement posted on Northern Rock’s website posted on Sunday by chief executive Adam Applegarth which says: “Your money is safe with us and if you want some, or all of it back, then you are perfectly entitled to it.

“The Bank of England has agreed to provide a funding facility to enable us to manage through the current global liquidity crisis. They would not have done so, if we were not a solvent, adequately capitalised, well run bank. I hope this helps to reassure you.”

But many customers are unswayed by these assurances and are having to wait to try and withdraw their savings. In central London customers have been told that they could be forced to wait up to seven hours to make any withdrawals. Some branches opened an hour early this morning and will remain open for an extra hour to try and cope with the demand.

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