Treasury lifts Northern Rock's savings guarantee
Northern Rock is to see the government’s guarantee for its retail deposits removed in May.
The Treasury has announced that the agreement will be lifted at the close of trading on May 24th.
It has described the move as an ’important milestone’ in the efforts to return Northern Rock to commercial strength.
Paul Myners, financial services secretary to the Treasury, said that the government has been working to get Northern Rock ’back to financial health’ over the past two years.
One step that was taken was to split the financial institution into two areas - a retail business and an asset management company - with the former expected to be sold back to the private sector ’in due course’.
The Building Societies Association welcomed the decision, saying that it will help create a ’level playing field’ in the financial sector.
Director general of the body Adrian Coles observed that there is a ’strong case’ for Northern Rock returning to the mutual sector in the future.
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