The Association of British Insurers has warned the government against raising the guarantees of large deposits that may be introduced, stating that it could distort the picture of the UK savings market .
Commenting in the wake of the government's announcement that it would be working and consulting with the financial services industry before increasing the guarantee for deposits in bank accounts .
Stephen Haddrill, the director general of the Association of British Insurers, said that the recent highly-publicised crisis at Northern Rock brought the issue to the forefront of people's thoughts.
He also noted that the savings market is much more complex than just reveolving around the issue of deposits.
"The new limit of £35,000 ensures that 98 per cent of people are fully protected, he explained.
"Anything beyond that could encourage reckless investing and be dangerous both for consumers and financial institutions ."
The crisis at Northern Rock attracted much media attention as the Bank of England opted to assist it with funds - the first time it has done so in a number of years.
However, the bank attracted support from the north-east community.
Insurer's warning over savings market
Insurer's warning over savings market
Fri, 12 Oct 2007
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