Credit Crisis: Brits Withdraw $4 Billion From Bank

British savers have withdrawn $4 Billion from ailing mortgage lender Northern Rock in a matter of days. Its 1.5 million savers are concerned that the bank has over-stepped its credit ratio and the queues around the block have driven the bank’s shares down 32% and the bank has asked to borrow money from the Bank of England. The BBC reports:

The bank is not short of assets, but they are tied up in loans to home owners. Because of the global credit crunch Northern Rock has found it difficult to borrow the cash to run its day-to-day operations… Northern Rock raises most of the money which it provides for mortgages by borrowing from banks and other financial institutions. Its costs have soared as banks have stopped lending to each other because of fears over potential losses on high-risk US mortgages, creating a credit crunch as liquidity dries up.

BBC