All bank deposits now guaranteed

EdInvestor

Chancellor steps in to halt bank run

A radical shake-up of the protection offered to savers has been launched after the government was forced on Monday night to guarantee the deposits of Northern Rock customers in an attempt to quell the growing crisis of confidence in the British banking sector.
Alistair Darling, chancellor of the exchequer, announced on Monday that the government was stepping in to guarantee all of Northern Rock’s deposits. The Treasury said similar assurances would be available to customers of any other lender that ran into difficulty in the current turmoil.


The Financial Times has also learnt that the Treasury, the Bank of England and the Financial Services Authority have concluded that the current system for protecting savers, which only guarantees deposits up to £35,000, is inadequate. They have already begun a review of the system and are minded to opt for a US-style alternative, ringfencing depositors’ money in the event of a bank’s failure.




The government’s move came amid signs that the crisis of confidence in Northern Rock was spreading to other lenders. Shares in Alliance & Leicester, Britain’s eighth-largest bank, plunged more than 30 per cent on concerns – denied by the bank – that it had been forced to call on the Bank of England for support. The bank said on Monday night that the government guarantee should remove any remaining doubt among customers.

:T:beer:




Sense at last.

Steve_xx

This is the second time you have posted the same thing:

regularsaver1

do you think people will listen?

deary65

When you see it in writing with the crown seal on it, then you might begin to believe it. In other words it's more spin!

Dave_The_Rave_2

and about time too !!

Why didn't the government do this on Friday or even the weekend, instead of leaving the country to get in this mess ?

teralin

On TV this morning, the news ticker tape running along the bottom of the screen said that all "existing deposits" would be guaranteed. Does this mean that any future deposits made into Northern Rock would not be covered by this guarantee. I don't trust government's promises. Show me the fine print first. However in this case, there won't be any fine print because the statement came after an extremely rushed reaction to the situation and was probably done on the back of a fag packet.