Are savings secure?

[anotheoldgit]

Depositors are already guaranteed their first �50,000 of their savings under the Financial Services Compensation Scheme.

With the worsening financial situation, is the above statement still true?

If all the Banks became bankrupt, would it still be true?

[R1Geezer]

The governement would never allow a major highs st Ban to fail, it would be game over for civilisation as we know it. The �50k guarentee is meaningless, if we ever get to that stage then it's financial armaggeddon anyway. The governement would just nationalise the banks wholesale anyway.

[Rollo]

Indeed. In effect the UK Government would underwrite the money, if necessary. They would have to.

But, at the rate the Government is "creating" money who can say just how much it will be worth, in real terms of what it will buy, if that situation ever arose.

[jake-the-peg]

Thing is Rollo we're all so used to hearing about the perils of inflation and how printing more money causes financial disaster.

But there's a real risk or deflation.

Sounds good! - but you get in the situation where nobody will buy things because it'll be cheaper next month.

It continues indefinately and the economy stagnates - so careful increase of the money supply counters this.

[Rollo]

That's true in the short term, but in the long run the cost of goods tends go up, or down, to match the amount of money available to buy them.

And if the goods, or their components, are imported then their cost in Pounds obviously reflects the value of the Pound against the value of the currency of the country from which those goods are imported.

A measured increase in the supply of money is fine, but if it is overcooked - and I think there is a risk that is going to happen - then there will be problems over time.

[jake-the-peg]

There is a risk.

Though the risk of doing nothing is probably greater!

PS - I'm still waiting for someone to wade in and point out that we couldn't take such action independently had we joined the Euro!

[Hotlardlife]

Dont need to - you just said it.

The problem is not if the Banks go bankrupt but if GB Lts goes bankrupt, and it is not so far fetched as it sounds.

[rov1200]

I would have though that anyone with more than �50,000 savings would have changed them to Euros some time ago. With the sinking pound I would bet that the better off have ditched it for another currency that is far safer.

[trt]

On Teletext now,
It says that post office account holders are not now covered by the UK's savings protection scheme.

Anybody know any more about this?

[WaldoMcFroog]

Irish post office, not UK.