£100,000 of your savings protected
by Kay Murchie
In his first key speech as Chancellor of the Exchequer, Alistair Darling, vowed to learn from the mistakes in the Northern Rock crisis and provide greater protection for ordinary savers.
He added that stricter rules for banks and lenders must come into force and informed financial institutions that far greater openness is expected from them. He cautioned that they would no longer be able to hide risky investments off the balance sheet.
Following the Northern Rock crisis, Government sources say a comprehensive review of the financial regulations will be carried out. The Government is preparing to increase the guarantee on savings held in any bank or building society account up to £100,000.
The current protection scheme offers a 100% guarantee on only the first £2,000 and 90% on the next £31,000 in the event of a crisis like the one at Northern Rock. Mr Darling said lessons are to be learnt and the necessary changes will be made to ensure stability.
The Chancellor added that he will protect ordinary savers so protection here needs to be strengthened.
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