uk bank deposit guarantees

The announcment today that the German government will guaranteei all bank deposits puts more pressure on the UK government to give the same guartantee to all UK depositors.

Ireland was the first country to make such an announcement followed later by Greece. Such is the fcragility of confidence in banking at the moment that it will now be difficult for other countries to resist giving these deposit guarantees..

Any country whch holds back from guaranteeing all deposiits risks seeing a flight of deposits. Just how bad the situation is for some banks and countries is shown by Iceland where the whole banking sector is having to be supported from collapse.

With the financial cris still running the decisions each of us make day to day will have a major influence on how things turn out. If we all rush to move deposits from bank to bank then the only result will. Be further instability. The short term decisions that each of us makes will have long term consequences which could far outweigh any short term benefits.


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