Northern Rock has confirmed that it is reconsidering its guarantee on savers' deposits, amid frenzied speculation that the so-called 'good' part of the bank will soon be sold.
The bank was divided into two parts earlier this year, with savings deposits of £19 billion and £10 billion of quality mortgages, and the 'bad' part consisting of £50 billion of mortgages and £4.5 billion of unsecured loans .
At present, Northern Rock savers are covered by the government's 100 per cent guarantee on all deposits, which was introduced to stop the run on the bank in September 2007.
A Northern Rock spokesperson confirmed that HM Treasury and the Financial Services Authority are currently reconsidering the guarantee in light of the government's decision to split the bank.
The spokesperson told Journallive.co.uk: "Given our strong liquidity and capital position, it is entirely appropriate they are looking at if and when it is appropriate to lift that guarantee but we cannot give a date when that may be. A three-month notice period will be given as and when any decision is made."
Northern Rock was taken into state ownership in February 2008, following problems with the credit markets.
Bank reconsiders guarantee on savers deposits
Financial Services > Saving Accounts > News
Bank reconsiders guarantee on savers deposits
Thu, 11 Feb 2010
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