Responding to Alistair Darling’s plans to increase the threshold for guaranteed deposits, Progressive Vision, the classical liberal think tank, has said that protection for customers is much better provided by the banking industry rather than the government.

Mark Littlewood, communications director of Progressive Vision, said:

“Many of the problems affecting confidence in the banking sector have been a result of regulatory failure. The banking sector is perfectly capable of providing its own guarantees for depositors – through a system of mutually underwriting deposits. Customers could choose the institution they wish to bank with based on the guarantees being offered. The Chancellor is deflecting attention from a failed regulatory regime by appearing to offer greater protection to consumers. His proposals will not improve consumer confidence or the financial sector’s credibility.”