Five years ago today, high street bank Northern Rock confirmed the media reports that it would have to seek emergency funding from the Bank of England.

The UK's fifth largest mortgage lender woke up on that Monday morning to queues of customers lining up outside, waiting to withdraw their savings - customers who often liked the bank, and its staff, but feared losing everything if it was allowed to go bust.

Northern Rock fell into difficulty because - like many other banks - it raised funding by packaging up existing mortgages into a package to sell on as debt to investors; a process known as securitisation.

The bank relied heavily on securitisation - and borrowing from the markets - in order to raise funds. When the US sub prime mortgage crisis hit (driven by American banks handing out mortgages to consumers who were not credit-worthy and subsequently defaulted on their payments), it caused both the borrowing and lending markets and the securitisation markets to dry up.

As fear gripped the markets, Lloyds TSB, Royal Bank of Scotland and Bradford and Bingley soon followed the same path. Unlike Lloyds and RBS which were nationalised, Bradford and Bingley found a buyer - Santander bought its branch network and £21bn deposit book, leaving the Treasury to nationalise the failed mortgage lender's £50bn loan book.

But Northern Rock struggled to find a buyer due to its "bad" assets. In January 2010 it was split into two - Northern Rock and Northern Rock Asset Management (NRAM), which housed the "bad" assets.

NRAM is still being managed by UK Asset Resolution which runs the "bad" bit of Bradford and Bingley, and is slowly paying back billions to the taxpayer.

Eventually, in November last year, Virgin Money agreed to buy Northern Rock, for half the amount of money the Treasury had put into it to keep customers' assets safe. If it floats on the stock exchange in 2014, the Treasury will receive another payment, currently pegged at £80m.

It's taken nearly five years for Northern Rock to find a new home - Huffington Post UK asked customers, those involved in Northern Rock's repackaging and those working in the banking sector at the time for their memories of that fateful day.

Gary Hoffman
Hoffman is chief executive of financial company NBNK Investments. Prior to this appointment he was chief executive of Northern Rock from 2008 to 2010. At the time of Northern Rock announcing it was seeking emergency funding , he was working at Barclays as vice-chairman of Barclays.

"I've got very vivid memories of that day - I was working at Barclays in the Moorgate office and I'd arrived at 8am for a day of cashiering.

"One hundred yards down the road was a Northern Rock branch, and even at 8am it already had huge queues outside of it. I walked along the queue outside Northern Rock and listened to what the people were saying.

"They were all relatively old people - pensioners mostly. They were all saying that they didn't want to take their money out because they liked the bank and the people who worked there.

"But after what they'd heard from Robert Peston (at the BBC) and other media reports over the weekend, they felt they had no choice because these were their life savings; they simply couldn't risk it. But many also said they one day hoped they'd be able to put their money back in the bank.

"The other thing I remember is the staff at Northern Rock - they were fantastic at calming people down and bringing out endless rounds of teas and coffees. It was amazing, especially as they hadn't had the time to have had that much of a briefing beforehand.

"Barclays had one of its best ever days for taking deposits. I'm sure the other banks took lots of deposits too, but we were certainly one of the bigger beneficiaries.

"But seeing those staff members and the link they had with their customers was one of the main reasons why I later took on the challenge of leading Northern Rock."

putting money in

One defiant customer shows he's backing the bank by depositing money in

Marie Grundy
Grundy was a national sales manager at Lehman Brothers when Northern Rock approached the Bank of England. She set up her own loan broker in 2007, after leaving Lehman Brothers in 2007.

"When I think back to the news coverage of the queues outside Northern Rock branches in September 2007, I get a chill down my spine. As what I was blissfully unaware of at the time was how those events would be a massive turning point in both my professional and personal life.

"If one thing really sticks in my memory from that day, it was that the so-called experts didn’t have a clue of either the ramifications of these events, or the duration of the effect of this single event would have.

"We were told it would be business as usual in 12 months, then in the second half of 2008 I realised it was more likely to be the twelfth of never, as life as I knew it seemed it would never be the same again.

boe

The Bank of England became the lender of last resort for Northern Rock

"Within weeks I was redundant and no prospect of being able to continue working as an employee within the financial services sector, as the domino effect began almost instantly.

"Lenders withdrew from the market one after the other. The only option available to me was to become self-employed and hold on for the ride – it was not a pleasant ride and it lasted for more than three years.

"To compound matters, my husband also worked in financial services, so literally overnight our income was reduced by two-thirds.

"I am actually very proud to have started a business during the most difficult trading circumstances possible, and come out of the other side, where others were less fortunate.

"However the principles of prudence govern every decision we make, and for me this is one of the few positive effects of the events following the 13 September 2007."

Nicola Mwaniki
Mwaniki works in publishing and lives in North London. The day before Northern Rock sought special measures, she had negotiated a buy-to-let mortgage and bought £200 worth of shares in the bank

“The property market had been up and down for a couple of years and in 2005 when we wanted to move we found it impossible to find a buyer. We were forced into the buy-to-let market.

"In 2007 our two-year deal came to an end and we returned to the same mortgage adviser we had used previously, who found us a deal at 5.4% which was another two-year fixed deal. For a second property with very little capital we were glad to sign up ASAP.

"It was a two-bed flat in north London, valued at the top end at £250,000 although we realised we would be lucky to get that price given the turbulent market.

"The paperwork wasn't complete but there were rumblings afoot that Northern Rock was in trouble. The shares were at such a low price we picked up £200 worth on the off-chance that a buyer would come in.

"The following day, the collapse was announced and Golders Green was manic with a long queue of people after their savings. It was funny seeing the local branch on national television and then seeing it in real-life.

irish northern rock

It wasn't just UK customers queuing to get their money out; Irish customers did too, as seen here

"The shares had been a gamble but the mortgage was real. Given that it was debt I wasn't really worried, half hoping that it would be just written-off, but there was a real apprehension as to who would come in for the mortgage book. And I wasn't sure I approved on the government taking my home should I default!

"Since then I have been pleased with the service Northern Rock and now NRAM have provided."

Brad Chuck
Chuck is a digital director and was working in advertising in 2007.

"I had savings of £2,000 and shares through a city trader of about £700. From the first minute I heard rumours of unrest, I was on the phone and down the bank.

"The main issue, which was awful, was the customer service. Wrong information given, no calls returned, misguided advice and quite frankly rudeness all the way through.

"Sure, jobs and money were threatened, but as a customer you must come first.

"It took me forever to get the savings out – the main reason being that my online account was suspended and I had a cap that meant I could only remove £200 a week from the account – and only from a Northern Rock branch.

"And the shares? After being told to hold on to them, they were gone in 24 hours and I have never seen them again. Not good."