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Savers 'Not Moving Money Out of Banks'

Contrary to recent reports there has been no exodus of savers from high street banks, new analysis has claimed.Payments association APACS said yesterday that there had been no significant movement of money out of banks and into "risk-free" providers, such as government owned National Savings & Investments (NS&I) and Northern Rock, the BBC reports.Savers received a further boost yesterday, when ministers said that the guaranteed bank deposit limited would be raised from its current level of £35,000 to £50,000. This move was designed to shore up savers' confidence in the financial system, with customer deposits an important source of revenue for banks.This confidence has been severely knocked by recent events. There has been a widespread freeze on inter-bank lending since the bankruptcy declaration of Lehman Brothers last month, with financial firms of how many bad debts tied to falling property markets other firms have on their books.Investors have also voted with their feet, sending bank stocks plunging worldwide. In turn, reports have suggested, customers are voting with their feet and moving their money out of banks, causing further balance sheet uncertainty and further mistrust over inter-bank lending - a vicious circle which has the potential to drive many more firms out of business.Prime minister Gordon Brown has called for calm, saying that the government is well-placed to ride out the volatile markets. "Wherever there has been a problem we have intervened and dealt with it," he told the BBC. APACS monitors the various payments systems used for UK money transfers, including CHAPS and BACS.

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