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| Version 1 | Version 2 |
|---|---|
| Savings guarantee plan considered | Savings guarantee plan considered |
| (about 1 hour later) | |
| Chancellor Alistair Darling says he is looking at ways of guaranteeing people's savings held by a bank or building society up to £100,000. | Chancellor Alistair Darling says he is looking at ways of guaranteeing people's savings held by a bank or building society up to £100,000. |
| He told the Times newspaper it was a "bullet that needs to be bitten" and would be paid for by a levy on banks. | He told the Times newspaper it was a "bullet that needs to be bitten" and would be paid for by a levy on banks. |
| Mr Darling said he was considering a wide package of financial reforms - but added that they were in the early stages of development. | Mr Darling said he was considering a wide package of financial reforms - but added that they were in the early stages of development. |
| The Bank of England has called for more protection for customers' savings. | The Bank of England has called for more protection for customers' savings. |
| The current system, guaranteeing 100% of the first £2,000 and 90% of the next £31,000, contributed to this month's run on Northern Rock, says the Bank. | The current system, guaranteeing 100% of the first £2,000 and 90% of the next £31,000, contributed to this month's run on Northern Rock, says the Bank. |
| It was "logical" for savers with more than £33,000 to rush to take it out, its governor Mervyn King told MPs this week. | It was "logical" for savers with more than £33,000 to rush to take it out, its governor Mervyn King told MPs this week. |
| 'American-style system' | 'American-style system' |
| Some of the planned changes to banking rules were already in the pipeline before the run on Northern Rock and would be announced when the House of Commons returns next month, Mr Darling said. | Some of the planned changes to banking rules were already in the pipeline before the run on Northern Rock and would be announced when the House of Commons returns next month, Mr Darling said. |
| According to the Times, he is looking at an American-style system, where savers' money is guaranteed and paid out days after a bank collapses, funded by a levy on banks and other financial institutions. | |
| Although a top figure has not yet been decided upon, Mr Darling said £100,000 was being considered. | Although a top figure has not yet been decided upon, Mr Darling said £100,000 was being considered. |
| He described the international credit crunch caused by the collapse of the US sub-prime mortgage lending market and the resulting problems at Northern Rock as a "major upset". | He described the international credit crunch caused by the collapse of the US sub-prime mortgage lending market and the resulting problems at Northern Rock as a "major upset". |
| Far East | Far East |
| "What's happened in America, and what's now affecting countries all over the world is a major shock to the system. | "What's happened in America, and what's now affecting countries all over the world is a major shock to the system. |
| "Its effects have been felt here, in the Far East, and we have to deal with it," he told the newspaper. | "Its effects have been felt here, in the Far East, and we have to deal with it," he told the newspaper. |
| But he was optimistic about the future of the UK housing market. | But he was optimistic about the future of the UK housing market. |
| Queues were seen at Northern Rock branches across the country | Queues were seen at Northern Rock branches across the country |
| "I take the view that the slowing of house prices and ensuring that they are based on reality is not a bad thing," he told the Times. | "I take the view that the slowing of house prices and ensuring that they are based on reality is not a bad thing," he told the Times. |
| "It is in no one's interest for house prices to go on rising year after year when that is not justified." | "It is in no one's interest for house prices to go on rising year after year when that is not justified." |
| Last week the Bank of England was forced to give emergency financial support to the Northern Rock. | Last week the Bank of England was forced to give emergency financial support to the Northern Rock. |
| The Newcastle-based firm was the highest-profile UK victim of the global credit crunch, triggered by the sub-prime mortgage crisis in the US. | The Newcastle-based firm was the highest-profile UK victim of the global credit crunch, triggered by the sub-prime mortgage crisis in the US. |
| The crisis resulted in a rush of customers at Northern Rock branches across the country queuing to withdraw savings, fearful that the business could collapse. | The crisis resulted in a rush of customers at Northern Rock branches across the country queuing to withdraw savings, fearful that the business could collapse. |
| The bank has refused to comment on claims in the Financial Times that it has borrowed £3bn from the Bank of England in the past week. | The bank has refused to comment on claims in the Financial Times that it has borrowed £3bn from the Bank of England in the past week. |