FSCS: realistic?

DocMartin

I'd be interested to hear people's views on the likelyhood of this scheme actually working in the event of one of the big institutions being allowed to go belly up?

There have been comments on this board regarding the fact that it has never actually been put to the test and further comments suggesting that the sums involved, should a big one like HBOS go down, mean that it couldn't actually work.

I'm just wondering if it's actually worth the effort of spreading savings > £35k among an increasingly short list of separate institutions that seems to be changing every few months IF the FSCS isn't actually viable?

dunstonh

I'd be interested to hear people's views on the likelyhood of this scheme actually working in the event of one of the big institutions being allowed to go belly up?

Its been covered in a few of the [too] many threads on this subject already.

There have been comments on this board regarding the fact that it has never actually been put to the test

No UK retail bank has failed in over 100 years. At the moment, the FSCS seems to handle mostly out of business advice mis-sale claims and frauds.

nd further comments suggesting that the sums involved, should a big one like HBOS go down, mean that it couldn't actually work.

look at the size of deposits LTSB will have and work out how much the FSCS would have to pay out to cover those. Where is that money going to come from?

I'm just wondering if it's actually worth the effort of spreading savings > £35k among an increasingly short list of separate institutions that seems to be changing every few months IF the FSCS isn't actually viable?

If it makes you feel more comfortable with smaller organisations then its very good. However, its next to useless for the big guns. Although they are not likely to go under so its not an issue. The big guns are buying the weak and that is usually a sign of strength as you cant buy others when you dont have the money to do so.

opinions4u

The FSCS is designed to give consumers confidence.

It fails because the £35k limit is too low.

As a protection scheme it is fundamentally flawed and, to be honest, probably shouldn't exist.

Placing your savings in a bank has a tiny risk attached. Always has had, always will have.

DocMartin

dunstonh wrote: »

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look at the size of depots LTSB will have and work out how much the FSCS would have to pay out to cover those. Where is that money going to come from?



If it makes you feel more comfortable with smaller organisations then its very good. However, its next to useless for the big guns.

This is what I was thinking.

Thanks for the comprehensive reply, sorry if it's been covered before but I'm new here - if that's an acceptable excuse?

dunstonh

sorry if it's been covered before but I'm new here - if that's an acceptable excuse?

No problem. With all the HBOS and LTSB threads and banks going under scare threads it has become a little boring for the regulars. Don't worry about it though. Ed will come along soon and post something negative about investment bonds and we will get back to normal service

BTW, get back on TV. Doc Martin is one of only two good programmes on ITV and I miss it. Kingdom being the other