Santander!!!!!!

oldvicar

Let's be absolutely clear.

pqrdef wrote: »

Political fiction. If a bank were to default, the Treasury would lend the FSCS the money to pay the compensation.
....

pqrdef really did mean as posted above, and not this version where I replace a full stop with a colon

pqrdef wrote: »

Political fiction: If a bank were to default, the Treasury would lend the FSCS the money to pay the compensation.
....

We need to remember that the Treasury promise to lend money to the FSCS came from the last administration as a hurriedly issued 'clarification', after a certain Martin Lewis had not been able to extract such an assurance from the relevant minister.

Martin_Lewis wrote:

In May 08, as part of my ‘How Safe are your Savings’ programme I managed to get an interview with the Cabinet Minister responsible, Chief Secretary to the Treasury Yvette Cooper, MP.
During the interview, I kept pushing the question that the FSCS didn’t have enough money to cover even the 25th biggest bank, her continued answer was thatthe government would ensure the £35,000 (the compensation level at the time) was paid out.

The problem was, when I asked her how, or did this mean the government would pay out instead, she simply wouldn’t give specifics, and I was left with the feeling it was more spin than substance.


This was deeply frustrating, how can you promise security but without explaining how you’d do it? The interview was done the day before transmission; the next day just yet before the programme went out we got this statement from the Treasury.

• "In the unlikely event a major bank became insolvent the Government would ensure that the FSCS has access to enough immediate funding to pay out depositors in a timely manner, through borrowing from the Government or Bank of England. The FSCS could then levy up to £4 billion per year from the financial services industry to cover the costs of compensation"

It was a triumph, by pushing we got a clarity of answer that has since become part of official policy. Sometimes having a go does work!

We also need to remember that as a result of this clarification the Treasury's rules were changed to ALLOW it to lend to the FSCS, not to OBLIGE it to lend.

So beyond the current maximum £4.1bn (from all financial sectors) the FSCS is entitled to raise on its own authority (sufficient to rescue a relative minnow of a bank), the guarantees are supported by nothing more than the political whim of, ultimately, the prime minister of the day.

The FSCS has currently levied/provided for an estimated £4m (million, not billion) of protection for deposits so far this year. [So far then, that's nearly enough for 50 people with £85K deposits].

I keep saying don't panic yet if your deposits are covered by the FSCS, and I mean it. They probably will be covered. But equally don't be foolish - spread your money across banks which you would expect to survive, or at least those you think have the best chance of survival, without recourse to the guarantee. Given the heading of this thread, it's only fair to point out that IMHO Santander UK might be one to class in the survivors group, although I am personally wary of their poor reputation for service quality.

opinions4u

Santander hold around £140bn in deposits.

Lloyds Banking Group is around the £250bn mark.

Nationwide must be nudging £ 100bn.

I'd estimate 75% of this to be covered by the FSCS.

If any of the big boys went there is little chance of the FSCS being able to recoup the payout and return funds borrowed from the Treaury this century.