Bank account protection sought for large deposits Paul Tucker, responsible for financial stability at the Bank, said that the accounts would be needed in the new era of bank reform, where only retail deposits of up to £85,000 will be insured. Of course, retail deposits - up to £85,000 in this country - will continue to be insured. And we probably also need measures - possibly segregated accounts - that can protect the temporary high balances that arise when, for example, a person sells a house or receives a legacy. "But regular creditors of banks should be at risk," Mr Tucker said. Speaking at an Association of Financial Markets in Europe book launch, he said it was a guiding principle of the international reform underway that banks should not depend on a safety net from taxpayers. In the financial crisis of 2008, no depositor lost any money, but regulators are keen to emphasise that creditors, including retail depositers, would not be 100pc protected if the bank ran into difficulty. "The upshot is that withdrawing the safety net from banks will require the other parts of the financial system to be sound, because they will have to stand on their own feet," he said. Mr Tucker said the effect of the new banking regulation would be that holders of bank paper will have a "big incentive to monitor the riskiness of banks." He said that while bank analysts had focused in the past on equity, he hoped leading analysts would focus in the future on debt. The deputy governor also suggested that the system might benefit from bankers' financial rewards being more closely tied to the amount of debt taken on by the bank. It may be helpful for banks' management to be remunerated partly through subordinated debt rather than just equity. Management would then have a clear personal incentive to focus on and contain tail risks. What I am describing is not a scary prospect. It should, in fact, be liberating to establish a financial system based more firmly on the principles of the market.