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  1. ITV Report

Northern Rock: 10 years on

Thousands queued to get their savings out of Northern Rock Credit: ITV News

It's 10 years since scores of people queued, outside Northern Rock branches around the country, to withdraw their savings after news broke that the company had asked the Bank of England for an emergency loan.

Customers were concerned they would lose their life savings if the struggling bank collapsed.

Eventually, Northern Rock was rescued by the government - which guaranteed money for savers but not shareholders. It was a swift and sudden end for a company which had expanded around the country, but always remained loyal to its North East roots.

Northern Rock started out as a building society before becoming a bank Credit: ITV News

A regular on the region's high streets in the 1960s and 1970s, Northern Rock (then a building society) slowly grew from being a local lender to a national power - particularly after transforming into a bank in the 1990s.

Its headquarters remained in the Gosforth area of Newcastle.

The bank had its headquarters in Gosforth Credit: ITV News

At its peak, the company's power and influence stretched well beyond the North East.

Shortly before the collapse, Northern Rock had grown to become one of the biggest mortgage lenders in the country.

In 2006 it had:

  • 6,000 staff
  • 70 branches
  • pre-tax profits of £367 million

Former finance director Bob Bennett was a driving force of that success.

He left before the lows, but remains fiercely proud of the highs:

However, the Rock's system for success eventually failed.

It had come to heavily rely on borrowing money from the American finance market. When a mortgage crisis hit the US, the cash dried up - and so, too, did Northern Rock's revenue.

The Chancellor at the time, Alistair Darling told ITV News Tyne Tees he wishes the government could have acted sooner to nationalise the bank and ease people's panic:

The bank was eventually split in two and parts of it sold off.

But we're still living with its legacy today.

The effects of the bank's collapse are still being felt Credit: ITV News

According to one expert, new laws to stop banks taking risks have hit us in the pocket.

Dr Fabrizio Casalin is a lecturer in banking and finance at Newcastle University:

The effects on the savers and shareholders at Northern Rock will be highlighted in more detail in the second part of our series tomorrow.

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