Thursday 20th September 2007
New guidance has been issued by HM Treasury on the types of savings and investments held with Northern Rock which are to be protected during the current "instability in the financial markets".
Deposits and non-collateralised borrowing are covered by the guarantee, according to the government body.
However, covered bonds, subordinated and other hybrid capital instruments and securities issued under the "Granite" securitisation programme are not guaranteed, the Treasury states.
Meanwhile, the pledge extends to accounts closed between Thursday, September 13th and Wednesday, September 19th, if they are returned to their previous level.
"Since it would otherwise be unfair to other banks and building societies, the arrangements would not cover any new accounts set up after September 19th," the Treasury observes.
The Bank of England this week revealed it is to provide an extra £10 billion in security for lending such as mortgages "in order to alleviate the strains in longer-maturity money markets".
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