Head of FSA announces that savers protection policies could have prevented run on Northern Rock.

Trumpo wrote a blog on this on November 8th http://www.trumpo.com/blog/business/bcci-barings-northern-rock/ and today the FSA have agreed.

“The UK could have avoided the run on deposits at the embattled Northern Rock bank had there been a US style depositor protection scheme, according to Sir Callum McCarthy, chairman of the Financial Services Authority (FSA). Such a scheme “undoubtedly could have been a real help in preventing the retail run,” McCarthy told the Treasury Select Committee, which is looking into the UK’s financial stability.
The FSA chairman said depositor protection schemes not only shore up consumer confidence, but are also a tool in financial stability because they make such bank runs less likely.

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