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Northern Rock shares plummet

Shares in the mortgage lender Northern Rock have plunged by as much as 23 per cent, and the chancellor, Alistair Darling, has authorised the Bank of England to provide the firm with emergency funding.Customers are being reassured that their savings and home-loans will not be affected, but branches have still seen queues of worried people trying to withdraw their money, and staff from rival banks have been targeting queues and handing out flyers to try and take advantage of their concerns. Experts say that Northern Rock, which has £113 billion in assets, is not necessarily in danger of going bust, but has certinly struggled to find the cash to keep its operations running because of the global credit crunch.In a statement this morning, the Treasury, the Bank of England and the Financial Services Authority (FSA) confirmed that short-term emergency credit would be provided to Northern Rock, and that the lender would be paying back the money at "an interest rate premium". The statement went on: "This liquidity facility will be available to help Northern Rock to fund its operations during the current period of turbulence in financial markets while Northern Rock works to secure an orderly resolution to its current liquidity problems."

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