£2000 and it's safe as Bank of England

Sep 17 2007 by Iain Laing, The Journal

We will survive pledge the Rock

NORTHERN Rock yesterday pledged it would survive the current crisis as it welcomed The Journal’s call for people to support the Newcastle bank by opening an account.

Bosses said that there had been a calming of the initial panic and which saw customers dash to withdraw their money totaling billions of pounds.

Deputy chief executive David Baker said there had been hundreds of messages of support from customers, particularly in the North-East.

He backed The Journal’s call for the people of the North-East to show their support for the region’s biggest company in its hour of need by putting some money in an account and improving the bank’s cash-flow.

“We absolutely will survive. People will speculate about a takeover but we are not in talks with anyone and do not plan to. We have to focus on running our business,” he said.

“The Bank of England would not have lent us the money if they did not think we could carry on. We appreciate all the support from our customers and friends, particularly in the North-East where I think we are held in a great deal of affection.

“But it would be fantastic if people opened accounts to show support. It is a tide-turning event for us. We want to get as many in as possible to bring cash liquidity back in to the banking market.

“All banks are having adverse problems because of the conditions at the moment where the lending market has frozen up. This is not of our making. It’s great to have hindsight but I don’t think we could have seen it coming.

“The staff have been absolutely fantastic. The atmosphere has been cracking in here today. We have had 650 extra staff coming in to give us support.”

And he reassured worried customers that there was never any chance of them losing their savings as all banks are covered by the Financial Services Compensation Scheme.

The scheme ensures that if you have up to £35,000 on deposit then you would, in the event of insolvency, get back all of the first £2,000 in your account and 90% of the next £33,000. But any money above the £35,000 threshold might be lost. Journal editor Brian Aitken said: “Northern Rock is a hugely important part of the North-East. It employs more than 6,000 people, the Northern Rock Foundation has pumped £175m into the good causes here and it is a figurehead for the economic strength of the region.

“We must stand shoulder to shoulder with the Rock in this difficult time. We must back up our words of support by investing what we can and give real help to a great North-East company.”

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