Hundreds of people lined up for a second day on Saturday outside local branches of a bank in Britain now facing a credit crunch, despite reassurances that it remains solvent.

Customers stand in a queue outside a branch of Northern Rock, the British mortage lender, in Harrow, northwest London, on Monday.
(Max Nash/Associated Press)

Worried customers first formed queues outside Northern Rock, the country's fifth largest mortgage lender, on Friday after word spread that the Bank of England had provided the company with an emergency loan.

On Saturday morning, long lines formed at 72 branches of Northern Rock across the country even before their doors opened.

The central bank and the British Treasury on Friday insisted there was no cash crisis but that Northern Rock was having trouble borrowing from other financial institutions.

Media reports said customers withdrew one billion pounds ($2.07 billion Cdn.) from the bank on Friday and that its shares were down nearly a quarter in value.

Responding to news of the bailout, British Treasury Secretary Alistair Darling told Sky News "there's plenty of money in the system. All the banks have money, but at the moment they're not lending to each other in the way they usually do."

Darling said the global credit squeeze stems from mounting U.S. subprime mortgage defaults and foreclosures, driven by property owners whose cheap introductory rates have soared. Many are walking away from unsold homes they can't unload because of stagnant or falling prices.

Worries over tightening credit saw investors selling shares in a number of high-profile U.K. banks such as Alliance & Leicester, Barclays and the Royal Bank of Scotland.