Wednesday, October 8, 2008

CUSTOMERS FLOCK TO NATIONALIZED BANK; FREE MARKETEERS CRY THAT'S NOT FAIR

ABC, Australia - British lender Northern Rock is being forced to turn away customers after being deluged with people seeking the safety of a deposit with a state-run bank. Northern Rock was nationalized last year as the credit crisis started to bite. The move meant that all future deposits with the bank would be guaranteed by the government. The bank has now been forced to pull six of its most popular savings products off the market because they were proving too popular. In recent weeks it has attracted lots of interest as nervous savers pull money out of institutions they think are failing and put them somewhere safer.

Northern Rock is one of only three UK High Street institutions that can guarantee 100 per cent of their customers' deposits, along with the Government-owned National Savings & Investments and the Post Office. In order to stop Northern Rock breaching European competition rules, the bank has promised to take no more than 1.5 per cent of Britain's retail deposits.

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