When will people start losing money?

MrOrchard

So far the government has backed 100% of savings with failing banks based here and abroad, and not fallen back on the "£50,000 only" guarantee.

Surely there will come a point when they can't do this any more and people actually start to lose money, up to the point when the pot for paying people £50,000 runs out as well.

What happens then? Or are the government convinced that there are only a few banks that will fail so they're backing them all to 100% of savings value with supreme confidence?

I might be very wide of the mark here though, I'm just speculating/trying to understand.

Caudle

The government can "print" as much money as it needs to shore up banks even if every single one of them fails. In practice, these are figures on a computer screen.

If it prints too much money, that will lead to roaring inflation - but that may, ultimately, be seen as the better of two evils!

MrOrchard

Hmmm, that doesn't sound fantastic.

climbgirl

Apparently Darling was pushed in interviews this morning to state whether this guarantee for over £50K would apply to any other banks that went under. He refused to say that it would, so I'm taking that as a warning that it won't happen again!