nationalisation of the banking system

So here in the UK today the government have used 37billion of our money to start nationalising the banks. last week we were told that if individual banks crash each person would be covered by the government to the tune of £50,000 per banking institution, meaning people could spread their money around to keep it all safe. So my question is, if the whole banking system is nationalised we would have, in theory, one bankng institution, so if the bank then crashes would savers only get a maximum of the £50,000, saving them millions in payouts?

[edit on 13/10/2008 by whoswatchinwho]

But surely the way round it, would be to have a max of 50k in each bank(split between banks), and not more. Then your covered i would assume.

[edit on 10/13/2008 by andy1033]

If your bank is nationalized and it still crashes, that means that your entire country went bankrupt and you won't end up with anything.

Simply because there won't be anything there to give you.

If the Gov guarantees everything and can't make good then nothing is guaranteed anywhere......see where this leads?

this is where the confusion comes in. its not each bank that is covered by the government, it is each institution, which could include many banks. for example the bank of scotland, the royal bank of scotland, the halifax and another few are all under one institution, so if you put £50,000 in each and two went bankrupt you would only get one £50,000 covered, losing £100,000. so if you expand this to all banks under one institution you couldnt spread your money around. im definatly no expert when it comes to money but it looks to me like the government is covering their backs so they dont have to pay too much out if the worst happens. sorry if i didnt explain clearly in first post. its the use of the words BANK and INSTITUTION thats confusing

[edit on 14/10/2008 by whoswatchinwho]