Mortgage lender Bradford & Bingley (B&B) rode out an early slide in its share price after it was forced to deny it was planning an emergency rights issue to prop up its balance sheet.

After its assurance that it is not intending to raise new equity capital and is funded for the rest of 2008 and into 2009, B&B shares dipped 13/4p to 1651/2p.

At one point they had lost more than 5% of their value. They have fallen 35% so far this year.

Deutsche Bank, which already had a sell recommendation on B&B shares, cut its price target from 180p to 150p today.

Today's sell-off prompted memories of last month's attack on rival bank HBOS. Its shares collapsed 17% at one stage on a day when rumours swept the City that it had applied to the Bank of England for an emergency loan.

This was vigorously denied both by HBOS and the Bank, leading to a probe by the Financial Services Authority into where the rumour began and who sold shares on the back of it.

Bradford & Bingley, Alliance & Leicester and HBOS are seen as the British banks most vulnerable to the credit crunch. Each used similar funding devices to the now-nationalised Northern Rock, although none of them relied quite so heavily on the money markets to fund their mortgages.

B&B, headed by Steven Crawshaw, said that in the current market environment it was monitoring closely "the balance sheet strength of the business and its funding plans".

Tomorrow, Prime Minister Gordon Brown is due to meet bank bosses following Chancellor Alistair Darling's call for them to pass on interest rate cuts to mortgage customers.

The banks will tell Brown they need to see more intervention from the authorities to improve liquidity in the money markets and increase confidence.