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| Version 3 | Version 4 |
|---|---|
| Fresh rules to guarantee savings | Fresh rules to guarantee savings |
| (10 minutes later) | |
| The scheme to protect savers with money deposited in UK banks and building societies will be expanded. | The scheme to protect savers with money deposited in UK banks and building societies will be expanded. |
| Under the guarantee - promised after the run on Northern Rock - customers' first £35,000 will be fully protected. | Under the guarantee - promised after the run on Northern Rock - customers' first £35,000 will be fully protected. |
| Chancellor Alistair Darling told the BBC that this was the first stage of a wider process to reform the system that protects UK savers. | Chancellor Alistair Darling told the BBC that this was the first stage of a wider process to reform the system that protects UK savers. |
| New legislation could protect savings of up to £100,000 and specially protect savers' assets should a bank go bust. | New legislation could protect savings of up to £100,000 and specially protect savers' assets should a bank go bust. |
| Under the old Financial Services Compensation Scheme, savers were given a guarantee for 100% of their first £2,000 of their savings, and 90% of the next £33,000. This would leave them with just £31,700 of their savings if a bank went into administration. | Under the old Financial Services Compensation Scheme, savers were given a guarantee for 100% of their first £2,000 of their savings, and 90% of the next £33,000. This would leave them with just £31,700 of their savings if a bank went into administration. |
| This was not enough to calm nerves when UK bank Northern Rock had to go to the Bank of England for an emergency loan. | This was not enough to calm nerves when UK bank Northern Rock had to go to the Bank of England for an emergency loan. |
| Thousands of savers queued outside Northern Rock branches or went online and withdrew several billion pounds over just a few days - until the Treasury stepped in and guaranteed all their savings. | |
| No unlimited guarantee | No unlimited guarantee |
| Mr Darling told BBC Radio 4's Today programme that using administrative powers he could ensure that 100% of the first £35,000 of savings will be protected straight away. | Mr Darling told BBC Radio 4's Today programme that using administrative powers he could ensure that 100% of the first £35,000 of savings will be protected straight away. |
| During the second stage of the reform process, he hoped to "separate savers money from the rest of a bank's assets, so that savers' money is as much protected as possible", Mr Darling said. | During the second stage of the reform process, he hoped to "separate savers money from the rest of a bank's assets, so that savers' money is as much protected as possible", Mr Darling said. |
| To do this, though, the government needed to go through a process of consultation with the banking industry, followed by new legislation. | To do this, though, the government needed to go through a process of consultation with the banking industry, followed by new legislation. |
| The chancellor, however, ruled out an unlimited protection of savings. | The chancellor, however, ruled out an unlimited protection of savings. |
| He said the government would study savings protection schemes around the world and indicated that the government might aim to protect savings up to around £100,000. | He said the government would study savings protection schemes around the world and indicated that the government might aim to protect savings up to around £100,000. |
| 'Market distortion' | 'Market distortion' |
| The Association of British Insurers has warned that a more generous savings guarantee scheme could distort the savings market, drawing people towards cash savings and away from investment products. | The Association of British Insurers has warned that a more generous savings guarantee scheme could distort the savings market, drawing people towards cash savings and away from investment products. |
| BBC political correspondent James Hardy said that Mr Darling was stepping up efforts to restore public confidence in the banking system after Northern Rock's near-collapse. | BBC political correspondent James Hardy said that Mr Darling was stepping up efforts to restore public confidence in the banking system after Northern Rock's near-collapse. |
| Previously, the chancellor had guaranteed protection for Northern Rock's savers, but the new guarantee applies to every bank and building society. | Previously, the chancellor had guaranteed protection for Northern Rock's savers, but the new guarantee applies to every bank and building society. |