Shares rise at Northern Rock

18 September 2007

The Chancellor's pledge to step in to calm the crisis at Northern Rock has caused shares in the bank to rise.

Shares rose ten per cent with dealers believing that the statement from Alistair Darling could have restored calm to the situation.

The crisis at Northern Rock saw people queuing outside branches to withdraw their money and shares in the bank plummeted by 35 per cent.

About £2 billion was withdrawn since Thursday, when Northern Rock announced that they were applying to the Bank of England for emergency funding.

The bank had been lending money on the credit markets and was exposed to bad loans in the US.

It is thought that about eight per cent of £24 billion deposits held on Thursday have been withdrawn by the bank's customers so far.

The bank has also taken out newspaper advertisements which will apologise to customers for any inconvenience caused and try to reassure them that the bank is safe.

Shares in other banks have also seen improvement, Alliance & Leicester rose 26 per cent, making back most of the 30 per cent it lost.

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