Northern Rock safety net in place

The Treasury has stated that it will cover all accounts existing at midnight on Wednesday 19 September.

This cover includes future interest payments, movements of funds between existing accounts, and new deposits into existing accounts. It also covers accounts re-opened in the future by those who closed them between Thursday 13 September and Wednesday 19 September, inclusive.

Since it would otherwise be unfair to other banks and building societies, the arrangements would not cover any new accounts set up after 19 September, other than re-opened accounts as set out above.

In the case of wholesale market funding for Northern Rock PLC, the Treasury confirmed that the arrangements would cover

• Existing and renewed wholesale deposits
• Existing and renewed wholesale borrowing which is not collateralised.

The arrangements would not cover other debt instruments including:

• Covered bonds;
• Securities issued under the "Granite" securitisation programme; and
• Subordinated and other hybrid capital instruments.

The guarantee in relation to Northern Rock PLC will remain in place during the current instability in the financial markets.