Northern Rock customers urged to stay calm

The chairman of the British parliamentary financial watchdog tonight urged Northern Rock customers to stay calm amid rumours that the bank has applied for emergency financial support.

Northern Rock has turned to the Bank of England as the “lender of last resort” after difficulties raising cash from the commercial markets, according to the BBC.

The decision was apparently taken after consultation with the Treasury and the Financial Services Authority.

There has been widespread volatility on international markets over fears that banks may have to write off massive quantities of bad debt held in US mortgages.

But Treasury select committee chairman John McFall said: “I don’t think customers of Northern Rock should be worried about their current accounts or mortgages.

“The fact that the Bank is willing to act as lender of last resort should be reassuring, because it means they think the problems are temporary.”

The Treasury refused to comment on the reports tonight, saying the issue was “commercially sensitive”.