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Savings guarantee under consideration

The government is considering plans that could mean savings up to a maximum of £100,000 are guaranteed in the event of a crisis.Following the Northern Rock affair, the chancellor, Alistair Darling, is looking into updating current legislation, under which the government pays out 100 per cent on savings of £2,000 and 90 per cent of those worth £31,000 if a bank collapses. In the Times, Mr Darling said that a system of larger guarantees was under consideration, with an upper figure of £100,000 possible. Angela Knight, chief executive of the British Bankers' Association (BBA) welcomed the suggestion, telling the BBC: "When you've had the sort of problem we've had with Northern Rock and the difficulties in sort of gripping the issue, what we can't do is just say 'that was a one-off, let's leave it alone'. "I think it is a one-off but we do need to look at our system and there's some obvious pinch points within the system."The Bank of England has also added its voice to those calling for greater protection for customers' savings.

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