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  • Savings pledge over Northern Rock crisis

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Savings pledge over Northern Rock crisis

Individual savings will be guaranteed to the value of £35,000 in light of the recent Northern Rock crisis, the Chancellor has pledged.Last month, thousands of panicked savers queued to get their money out of Britain's fifth-biggest mortgage lender after it had to seek emergency funding from the Bank of England.Previously, the Government guaranteed the first £2,000 of savings and then 90 per cent of the next £33,000, for a maximum of £31,700.However, in a speech, Mr Darling said: "Today I can announce the Financial Services Authority has increased the limits of the Financial Services Compensation Scheme so that it covers from today in full the first £35,000 of people's deposits in any institution at 100 per cent."Sharing the platform with former US Federal Reserve chairman Alan Greenspan, who now acts as an adviser to Prime Minister Gordon Brown, Mr Darling added that the increased limit is the first step in improving the financial compensation scheme.Asked earlier about how much the limit could be raised, he said: "I want to look at up to £100,000."The Financial Services Authority and the Bank of England have come under fire for allowing the Northern Rock debacle to happen.Mr Darling continued: "In a global financial market no country or company can insulate itself entirely from international risk."So if a problem does happen, we need to be able to deal with it quickly to maintain stability and confidence."He added the UK will advocate swift action on improving regulations governing banking solvency and liquidity at this month's IMF meeting in Washington.He continued: "I will put forward practical steps I believe the international community can take, recognising that regulation needs to focus on solvency but also on liquidity."Mr Darling said he would push for the swift implementation of the agreement on banking solvency, a more urgent approach to new rules on liquidity and an improvement in transparency to prevent risky assets being hidden off balance sheet.© Independent Television News Limited 2007. All rights reserved.

ITN | October 1, 2007Watch more videos from ITN

Tags:. .reserve. .prime. .practical. .however. .funding











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