Nevertheless, they can be confident that their deposits up to £85,000 are guaranteed by the British government should there be a loss of confidence.

Although it is a wholly owned subsidiary of Madrid-based Banco-Santander, the UK offshoot is regulated by the Financial Services Authority and would have access to Bank of England emergency funds in the unlikely case that it is threatened.

Senior UK regulators noted last night that Santander UK had more share capital and a better cushion of cash than the Spanish bank and it is hermetically sealed from the problems of the Spanish banking system.

Should I be worried about Santander?

The bank is keen to underline just how much it is ring-fenced from its Spanish operations. Santander's UK operation is wholly-owned by, but autonomous from, Banco Santander. It is authorised and regulated by the UK's Financial Services Authority (FSA) and a spokesman says it has its own balance sheet, separate from its parent company.

He also says 90% of the UK bank's balance sheet is UK-related money. "Sovereign exposures to Europe [excluding the UK] at 31 March 2012 were not significant, at less than 1% of total assets, and primarily related to Swiss government securities," he says. "Total exposure to eurozone periphery countries was less than 0.3% of total assets."

If the parent company wanted to extract money from the UK bank it would have to sell it or pay itself a dividend, but that would only be approved by the FSA if it met strict UK capital requirements. In short, this means if the Spanish part of the bank was in trouble it could not prop itself up with money extracted from the UK bank.

The spokesman says: "Both Santander and Santander UK are strong businesses focused on retail banking with no exposure to toxic financial products. Santander's UK business is strong and has a standalone credit rating which is one of the highest credit ratings of any UK bank."

Ray Boulger of mortgage brokers John Charcol says Santander is "probably the safest bank in the UK" because nearly all its savings and lending is in the UK. "If it gets very messy in Europe the knock-on effect is likely to hit other banks such as Barclays and Lloyds more than it would hit Santander," Boulger adds.

Spanish-owned bank Santander moved to reassure savers it was not in danger of collapse after its UK arm was downgraded by credit rating agency Moody’s.

http://www.dailymail.co.uk/news/article ... z1vK0XMt8d
Remind me. Which paper tried to disassure (is that a word?) people yesterday?

Britain could be plunged into another credit crunch if Greece leave the euro... and this time we may never recover, warns finance chief