'Consumers to receive compensation sooner'

25 September 2007
Customers of banks who go bust could receive compensation in a shorter period of time if proposed changes to the banking system are introduced, according to one expert.

Following recent problems within the banking industry, chancellor Alistair Darling is said to be considering introducing new laws which may guarantee savings up to £100,000.

Donna Bradshaw, financial strategists at the IFG Group, told BBC One's Breakfast programme that it can take months for people to receive any compensation following the collapse of a financial institution.

"Under this scheme they want to do it like they do in the US and actually return money to savers after a few days," she commented.

Last week, Mr Darling authorised the Bank of England to provide financial assistance to struggling lender Northern Rock.

The institution said that it is a "lender of last resort" and is in a position to help out other organisations in similar situations.

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