Northern Rock removes its guarantee
Northern Rock’s 100 per cent savings guarantee is to be removed and the Building Societies Association BSA is glad.
The Treasury announced earlier this week that from May 24th, savers with the bank will revert back to ordinary £50,000 protections offered by the Financial Services Compensation Scheme.
BSA director-general, Adrian Coles, said the removal represented “a significant step” to returning the cash savings market back to a level playing field.
“The BSA has actively lobbied for the removal of Northern Rock’s 100 per cent savings guarantee as societies are fast becoming the only providers of financial services not to be directly subsidised or supported by the state.”
He added that the guarantee has enabled Northern Rock to attract substantial inflows following the bank’s nationalisation.
“We also call on the Treasury to ensure that the part-nationalised banks – Lloyds and RBS – do not operate in a way that distorts the savings market through their Government ownership,” Mr Coles said.