Darling to announce bank measures

1 July 2008 08:15am

Chancellor Alistair Darling is set to announce new measures aimed at protecting savers' bank deposits.

The Treasury said the Banking Reform document follows consultation launched in January over measures to improve financial stability.

Proposals to change the banking system were put forward in the wake of the near collapse of Northern Rock last September.

The Government - which was forced to nationalise Northern Rock in February - is aiming to have new legislation in place to prevent a repeat of the crisis.

According to the BBC, Mr Darling could reveal a rise in the threshold of guaranteed deposits from £35,000 to £50,000.

The existing Financial Services Compensation Scheme guarantees all deposits up to £35,000.

The Chancellor may also make banks pay into the scheme up front to enable savers to receive compensation immediately from a prepaid fund instead of the current scheme where they can wait months.

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