Saver protection rules to be reviewed
Northern Rock crisis triggers re-think on account holder guarantees
Savers could benefit from new legislation to protect their money, the Financial Services Authority (FSA) has announced.
The announcement comes in the wake of the Northern Rock crisis, where savers queued to withdraw billions of pounds from the bank after it was forced to ask the Bank of England for an emergency line of credit last Thursday.
Following the announcement by the Treasury that it would cover all of Northern Rock's deposits, withdrawals from the bank have eased off.
Current rules guarantee the first £2,000 of savers' money and 90% of the next £33,000. The FSA said the rules will be reviewed in an attempt to reassure savers. Chief executive Hector Sants said the organsation needed to look at why consumer confidence in Northern Rock had been eroded so easily and to look at the limits for account holders.
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