The Financial Services Authority has issued a statement to reassure the market that mortgage lender Northern Rock is not in danger of collapse after there was a rush of customers to withdraw their funds.
'The FSA reiterates that it judges Northern Rock to be solvent and that savers can continue to deposit and withdraw funds,' the FSA said in a statement.
The FSA said problems customers had faced in withdrawing money were not linked to its financial health and were 'entirely logistical'.
Northern Rock share price collapsed on Friday after borrowers tried to withdraw their money after the lender agreed an emergency loan from the Bank of England to cope with a lack of liquidity and high interest rates in money markets.
FSA chairman Callum McCarthy added: 'To be absolutely clear, if we believed that Northern Rock was not solvent, we would not have allowed it to remain open for business.'
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