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Clegg: Government must guarantee all bank deposits to protect British savers

September 30, 2008 12:30 PM
Originally published by UK Liberal Democrats

Liberal Democrat Leader Nick Clegg has called for all bank deposits to be protected as the global financial crisis deepened. Speaking in the wake of the failed vote on the American bail-out package in the US Congress, Mr Clegg said the Government must temporarily guarantee for all deposits in the British banking system.

With share prices plummeting following the failed vote and the numbers of new mortgages falling sharply, Mr Clegg also called for cross-party talks on how to deal with the crisis.

Nick Clegg said:

"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.

"But today a copper-bottomed guarantee that all people's money and savings in British banks are safe must be the priority.

"Then, in the longer term, all parties must work together to find common solutions for a re-regulation of the City.

"We have seen the dreadful effects of the bonus culture in the City that has led banks to take unacceptable risks for short-term gain ahead of long-term stability.

"If we are going to reverse the greedy banking culture that went on for too long, we need to start at the top. 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."