Yesterday we talked about the run on Northern Rock bank in England, as customers flocked to the physical banks as well as online to draw out their money. The online traffic was so heavy the computer system crashed, prompting customers to assert the system was shut down on purpose.
While officials denied the accusation, it didn't help assure bank customers as they lined up again Saturday to draw their funds out of the bank. Extra personal were enlisted to deal with the demand.
One report said the line at one bank branch observed was around 100 metres long Saturday morning.
On Friday alone, reports are customers already had drawn out about £1 billion from the institution.
In an editorial by The Daily Telegraph, new Prime Minister Gordon Brown was partly blamed for the fiasco saying: "Gordon Brown must accept responsibility for this credit bubble: in his 10 years at the Treasury, he was happy to benefit from a sense of faux-prosperity based, not on rising productivity, but on house prices, loans and, to a degree, immigration."
Northern Rock is the first British bank to admit the global credit crunch has come home to them in a serious way.
Most of this has come about from news slipping out that the bank told the Bank of England it was facing large problems concerning raising cash to cover its liabilities. When people heard the news, they converged on the bank to draw out their funds.
Even so, at this time the bank hasn't had to borrow and money from the Bank of England's emergency fund.
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