We must await definitive proposals, but I suspect that this £100,000 will be a maximum guarantee per person rather than a guarantee per financial institution.
If my suspicions are borne out the the only people to benefit will be those with savings in excess of £40K who have not had the sense to spread their deposits.
Those with savings in excess of £100,000 who do spread their deposits would in such circumstance be faced with a reduction in the extent of the guarantee.
There is a calculation that I cannot make because of lack of information but I can envisage circumstances where the Government fiancial exposure would in fact be less than at present in which event the apparently generous increase to £100,000 would be no more than misrepresentative window dressing at a time of reduced confidence and in the lead up to a possible early election.
I hope than my cynicism proves to be illfounded.

J BOND, Ambleside, UK

It's not a fiasco. Northern Rock had a very aggressive, high risk business model, and was expanding rapidly. There is nothing wrong with that, as long as the shareholders are prepared to accept that shares can go down as well as up.

In the event the model came unstuck. People withdrew their money. The Bank of England then stepped in to limit the damage, so the shareholders rather than savers ended up taking virtually all of the hit. Only a small amount of taxpayers' money is at risk, and everything has worked just fine.

Giving guarantees to large deposits means that the central bank loses all discretion, and foolish bank managers are not punished by runs on their banks. Also, it could put large amounts of taxpayers' money at risk at the very time Her Majesty's Treasury cannot afford it.

Malcolm McLean, Bradford, UK

There must be a general election coming very soon, offering guarantees from a worthless government.

David.E, Bath, UK

It always amazes me with politicians how something as simple as guaranteeing savers their money needs such a lot of thought and time to enact and bring into law. Whats so difficult, what is the problem or is it once more they need time to build in 'get out clauses'. It is in every bodies interest that savers money is guaranteed no matter whether you are the saver, a shareholder, the bank or even the government. Talk is cheap Mr. Darling and unless you move your ass on this one other banks may suffer a run in the near future as well.

Mike, Alicante, Spain

I believe our Queen should guaranty savings in banks.

Sally, London,

I don't know what the figures are but I would think that if he is proposing to underwrite pretty well every bank account in the country the amount would be staggering. I doubt that the government could come up with such an enormous amount of money and so would take this promise with a pinch of salt.

The very fact that he is making such a pledge suggests that there may be something unpleasant in the offing. Perhaps it's time to buy Soverigns or Krugerrands which aren't "underpinned" by any politician.

Simon, Chatham, Kent

If a bank or building society goes broke, savers are guaranteed 100 percent back on £2000 and 90 percent back on the next £33000 and any money over that is not guaranteed, so will probably be lost. This guarantee scheme was put in place some years ago, why hasnt the amount been raised in line with inflation. If, say, this guarantee was imposed 10 years ago, £33000 then must be worth something like £50000 now so the 90 percent guarantee should be on £50000 or more, not £33000. Why has it taken so long for the government or FSA to increase this guarantee in line with inflation etc

michael pickles, bournemouth, england

By underwriting the excesses of the banks lending policies you effectively allow the overlending to continue unabated. The outcome is that such things as the housing market do not collapse, and in effect because of this action will allow prices to increase. The economy looks fine as there appears to be real activity ongoing. New Labour remain in a great position to call an election and yet again win. It's about retention of power at any cost.

I think the leaders of the UK should take out a leaf of the politicians in the US and tell the truth. Bad legislation, bad government, and irresponsible people created the mortgage blip. There is a blip in the UK, but Darling has just put a plaster on it.

Paul, London, Canada

Tighter legislation and better enforcement of existing legislastion governing the credit industry is the answer. Banks and credit card companies have been acting irresponsibly, and in many cases unlawfully, for years. Their greed is at the centre of both the bank charges scandal and this latest debacle. I agree with Mark from Newcastle that it is not the tax payer's responsibility to bail our private companies who make poor decisions and would take his solution further by suggesting they should be legally required to pay into an insurance scheme. If you want to drive a car, an activity which potentially causes serious risk to other people, you are obliged to pay for insurance. The same should be true for businesses which want to take risks with people's money.

Alli, Stockton-on-Tees, Cleveland

The 'fiasco' of Northern Rock was avoidable. The Basel Committee on Banking Supervision working paper no.13 - Bank Failures in Mature Economies - April 2004 explains what went wrong in the past and now history is repeating itself. So don't blame the smart ones that made money out of this debacle. Blame Northern Rock for lending up to 125% on mortgages, more than most people can pay back on their salary. What else did they sell with their mortgages? One hopes that fraud or misselling is not going to become an issue now that the BoE has guaranteed their loan. And now of course a Labour Government quick fix solution as always...

Chris Bower, Navarre, Florida

Either the Chancellor reads 'the Times' or Anatole Kaletsky reads his mind!

Gordon Cardew, NORWICH, UK

As long as the taxpayer does not pick up the bill, it is good idea to increase the limit for savings protection. This will mean lower interest rates but confidence in the banking system is paramount. At the same time there should be a return to credit control that we had in the 1970s. Consumers wishing to have credit - largely HP (Hire Purcase) - were required to put down a third deposit in cash; this helped to prevent impulse spending and made the consumer more aware of the risk of borrowing. This measure would lead to lower borrowing costs for the resonsposible majority who will not have to pick up the cost of loan defaults.

Steve Marchant, Torquay, England

Individual investors have to accept some risk, guaranteeing the whole of the investors' capital will only lead to lower interest rates as someone has to pick up the insurance cost.. The current formula of 100% of the first £2000 plus 90% of the balance up to £35000 however is too low. Why not just increase it to, say, 100% of the first £5000 and 90% of the balance up to £100000 and then subsequently to increase these amounts in line with the RPI.

C Byrne, Pinner, Middlesex

If some hedge funds really are speculating like this report suggests, then perhaps trustees of company pension schemes need to consider assessing the wider impact (such as the moral aspect) of using this type of investment vehicle, in the same way that many boards of trustees already engage in socially responsible investing (SRI).

Mike Jones, Telford, Shropshire

Sounds like a nice idea but the last time the B of E guaranteed something I am reminded of what happened with the money traders and the value of the pound.

We are still as a people paying for that.

Viv, Quebec, Canada

Northern Rock should have announced that they where going for a stronger secure balance sheet when they issued a profits warning. Going for growth is a fine thing but security of funds is the major item in the minds of depositors and investors, and would have reflected favouribly with everybody.
All they said was "people can get their money out if they want to"
Not the most reassuring message.
How about " Looking ahead we have approached the BoE to ensure future funding as all banks have done lately during the recent volatility. The BoE ensures liquidiy at these times"

Any business does nort want to fall down a crevasse due to short term global problems and the BoE is supposed to bridge these gaps. for the banks.

wIilli, notts,

Good point by George and Mark,

This is a nice sentimental gesture and one probably designed as headline grabbing and to divert attention after the Northern Rock scandal, itself only likely to be the tip of the iceberg after banks have now been told they are effectively immune from risk and will be supported in their imprudent lending decisions no matter how much it costs the UK taxpayer or how unlawful under EC Law.

Who will pay for it? Will it be risk underwritten by Insurance Companies and if so what if they become insolvent or refuse to pay as they at present refuse to pay for non disclosure that is a figment of their imagination or deliberate avoidance of liability depending upon how you look at it?

Presumably the UK consumer will pay in extra charges or reduction in interest for a policy that would never pay out anyway. This would leave a 'premium' investment product competing with overseas unregulated products unsupervised by either the FSA or the BOE?

Pete Balchin, Solicitor , Bristol, England, UK

The article suggests that Darling wants savers to spread money around. I think it will probably be 100,000 per bank. Otherwise what is the point of spreading money around.

FRANK, Bedlington, UK

The scheme sounds sensible but who is funding it?

It should not be up to the Government to bail these banks out, their job should merely to manage the scheme. These companies make billions in profit and should either pay into an insurance fund or be left in position where savers know that their money is at risk.

Mark, Newcastle, England

Yes, but is this another headline grabing proposal where this government again makes another bad policy in the 'small print' that detters saving for a pension? Specifically, is it a £100,000 guarantee per account in different banks, or a total £100,000 per person? Currently someone can have the 90% protection on £35,000 in many banks to spread the risk, whilst these new proposal will probably cap it at £100,000 per person (as in the USA), and hence it offers worse protection for many better off people.

George, London,