A NEW book on the crisis last year at British mortgage player Northern Rock throws some interesting light on the frenzy of withdrawals by customers of its Irish business.

To recap, Northern Rock was almost swallowed whole by the credit crunch last September when it emerged that it had funding difficulties.

Its online banking facility froze and panic-stricken customers withdrew £1 billion (€1.26 billion) in funds in one day alone.

“Faced with such panic outside its branches, Northern Rock called for calm,” writes British financial journalist Alex Brummer in his book The Crunch.

“However, calmness was in short supply among the company’s bosses that Friday evening (September 14th) as they dispatched a team to two of its major centres in Dublin and Guernsey, where they were paid triple time over the weekend to stuff envelopes with cheques to cope with the torrent of irate customers who wanted to withdraw their money.”

How ironic that at a time when the bank was on the verge of going under, it had to pay a sweetener to staff to hand back money to depositors.

The move failed to stem the tide. “As word spread, the queues were even longer on the Saturday morning. Just as they had done the day before, branch staff literally shovelled money out to queuing savers.”

By the time the panic subsided, Irish savers are believed to have withdrawn €1.3 billion from their accounts, although Northern Rock has never confirmed the figure. It is thought to still have about €1 billion on deposit in Ireland.

Ironically, it’s probably the safest bank around since Gordon Brown nationalised the business.