There have never been a run on the bank in my lifetime. I know from history books that in the 18th century and till 1930 it was a common ocurrence, but since then the Central Banks seemed to have eliminated the recurrent panics that used to seize the savers. But this week we witnessed the first run on a British bank since the collapse of Overend and Gurney in 1866; and second, the transformation of UK bank deposits into public debt at the stroke of a pen. The panic is worth of study as the management's message is worth recording:
May I begin by offering our customers my sincere apologies for the anxiety and inconvenience that we have caused you. I know how worried many of you must have been.
Today I want to make it emphatically clear to all Northern Rock customers that we are open for business as usual.
We remain a well-managed company and continue to be a safe place for your savings, loans and mortgages.
The simple fact now is that the Chancellor has made it clear that all existing deposits in Northern Rock are fully backed by The Bank of England and are totally secure during the current instability in the financial markets.
We are all working night and day to provide you with the service that you expect from us and deserve from us. And I would like to express my appreciation to our staff for their work and commitment over the last few difficult days.
Above all I would also like to thank all our customers for their support and understanding.
I am also pleased to announce that any customer who has paid a penalty for withdrawing their investment, will have the penalty refunded if they re-invest the same amount in the same type of account by 5th October 2007.
These have been troubled times but Northern Rock will prevail. We will not let you down.
Adam J. Applegarth