Bank of England Props Up Mortgage Lender

Northern Rock shares dive, panicking patrons
By Sam Gale Rosen,  Newser Staff
Posted Sep 14, 2007 9:12 AM CDT
Customers queue to enter a branch of British bank Northern Rock PLC in Croydon, south London, Friday, Sept. 14, 2007. The Bank of England said Friday it had approved emergency funding for Northern Rock...   (Associated Press)
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(Newser) – Shares of Northern Rock fell 25% today on news that the group, Britain's fifth-largest mortgage lender, got an emergency shot of cash from the Bank of England last night. As worried customers lined up outside Northern Rock branches, the central bank's chancellor urged calm. "At the moment there is plenty of money in the system," said Alistair Darling.

Neither the Bank of England nor Northern Rock would say how much the central bank put up. The shock hit other banks and spread through the wider market, pushing the FTSE Index down by 2%. Northern Rock is the first major UK institution caught in the global credit crisis, the Guardian reports. Its shares have already dived 50% this year.