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| Britain |
| UK guarantees all of Northern Rock bank's deposits |
| 2007-09-17 |
| The government has said it will guarantee all deposits with the Northern Rock bank. More than £2bn has been withdrawn by customers since the bank applied for emergency funding from the Bank of England last week. Banks in the UK are already covered by the Financial Services Compensation Scheme - but normally those with savings of more than £2,000 stand to risk a slice of their savings if a bank goes bust. I think this would be like the FDIC guaranteeing all deposits (no matter how large) in a US bank undergoing a run on its deposits. See this stunning graph of shares in Northern Rock The chancellor of the exchequer was on BBC radio this morning saying: “If people want to get their money out of Northern Rock, they can. The money is there and it is backed by the Bank of England so they can get it. The problem at the moment is not that there isn’t money in the system, because the banks do have a lot of money. It is the fact that they have been reluctant to lend to each other whilst they work out what the extent of their risk is following on the difficulties in the American market.” |
| Posted by:Anguper Hupomosing9418 |
