The Liberal Democrats have called on the Government to temporarily guarantee all British bank deposits.
Nick Clegg, leader of the Liberal Democrats, spoke out after news UK depositors were moving their cash to Irish banks after the government there agreed to guarantee all deposits and loans for two years.
Speaking this morning, Clegg says: “We are now in the eye of an economic storm. The financial system urgently requires some breathing space. British people need total reassurance that their savings are safe.
“The Liberal Democrats will support the Government in issuing a blanket guarantee for all deposits in the British banking system. We will co-operate fully with the Government in passing depositor protection legislation next week when Parliament reconvenes.”
However, Clegg says the current crisis means the Government cannot wait until next week, and needs to put in place a ‘copper-bottomed guarantee’ until Parliament can fully discuss the issues involved.
Yesterday, the Irish Government announced it would protect all deposits and loans made by six major financial institutions until September 2010. Early reports suggest many UK deposits are being withdrawn and moved to Irish banks for safekeeping.
Clegg said re-regulation of the City was a future priority for all parties to ensure such a problem does not arise again, and said bonus culture needed to be tackled.
“If we are going to reverse the greedy banking culture that went on for too long, we need to start at the top,” he says.
“This means an end to all bonuses for boards of directors in British banks that do so much to fuel short-term speculation. Giving them salaries, if necessary very generous ones, will create fewer risks in the future.”
Rumours suggest Gordon Brown is considering raising deposit protection limits to £50,000, but this would still make the Irish guarantee highly attractive to those with larger sums in deposit.
If you would like to comment on this story, contact:
Tel: 020 7484 9805
e-mail: [email protected]
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till