Northern Rock shares 'regain strength'
24 September 2007
Shares in troubled mortgage lender Northern Rock have slowly gained ground, following a pledge of assistance from the government.
Worried customers queued up outside branches of the bank across the country over the last week to withdraw their savings after it was feared Northern Rock would collapse.
However the firm has now stated that eight out of ten people calling the bank are now inquiring how to put savings back into it, while the bank's shares have increased by eight per cent.
Chancellor Alistair Darling has now pledged that the Bank of England would guarantee all existing deposits in the bank.
Mr Darling said the assistance was importance so as "to put the matter beyond doubt" adding that maintaining a "stable banking system and public confidence in it" was of great importance.
The bank, which has seen half of its value disappear since Friday, has been helped by the announcement that the Bank of England would fund it, as well as injecting £4.4 billion into financial markets at an emergency rate of 5.75 per cent.
