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03/10/08
Guarantee for savers increased

Bank savings of up to 50,000 will be guaranteed by the government from next week and the sum could be further increased as regulators battle to restore confidence in the banking sector.

Britain's Financial Services Authority said on Friday it had raised the compensation limit for savings to 50,000 per customer claim from 35,000 pounds, after signs of bank customers withdrawing cash to put into perceived safe havens.

The FSA said the new compensation ceiling would take effect from October 7th and customers with joint accounts will be eligible to claim up to 100,000 pounds.

Several countries have attempted to restore confidence among savers this week amid a credit crisis which has raised fears that more bank failures could result in savers losing money, though Britain's move fell short of Ireland's complete guarantee for all savers.

The Irish parliament on Thursday approved legislation that will guarantee 400 billion euros worth of liabilities at Irish banks which is more than twice the country's annual gross domestic product.