Money News
The Treasury has confirmed that the guarantee arrangements, previously announced to protect existing depositors of Northern Rock, will be extended to all new retail deposits made after September 19th, including those made from today (October 9th).
These arrangements will cover all retail deposits including future interest payments, movements of funds between accounts and term deposits for the duration of their term. They will be complemented by additional facilities through the Bank of England.
The arrangements and revised facilities have been put in place at the request of the bank in order to allow it to pursue the full range of its strategic options - including being bought out - at least through February. Northern Rock will pay non-recurring costs of about £50 million for the extension of the arrangements, which are designed to ensure it doesn't receive a commercial advantage.
As previously announced, the arrangements to protect depositors will remain in place during the current instability in the financial markets.
09 October 2007 © Moneyextra.com
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