FSCS cash limit coming down to £75K / new £1m temp protection

masonic

polymaff wrote: »

I doubt that the challenger banks also want to receive a sudden burst of new investments, either.

Really? .

polymaff

TheTracker wrote: »

The tightening of a constraint that effects a small number of people is given broader coverage and more attention than the loosening of another constraint that brings benefit to many more.

I'd like to see you justify that claim.

polymaff

masonic wrote: »

Really? .

Definitely. I have that from one of the senior managers of one such bank. He explained that with such high rates being offered to savers, they had to minimise the funds held ready for, but not yet lent out, very, very carefully.

colsten

polymaff wrote: »

Definitely. I have that from one of the senior managers of one such bank. He explained that with such high rates being offered to savers, they had to minimise the funds held ready for, but not yet lent out, very, very carefully.

That sounds like a misunderstanding. Nothing forces challenger banks to offer 3, 4 and 5% instant access accounts and none of them do offer anything like that as it wouldn't be viable for them. However, they do offer plenty of lower rates, and they need the money so that they can lend it out and make a profit. It's what banks are about, making money from lending.

colsten

polymaff wrote: »

I'd like to see you justify that claim.

Just look at the MSE article on it.

Have you seen any article anywhere that leads with the £1m cover?

masonic

polymaff wrote: »

Definitely. I have that from one of the senior managers of one such bank. He explained that with such high rates being offered to savers, they had to minimise the funds held ready for, but not yet lent out, very, very carefully.

This limit reduction affects 5% of savers. Said customers will have a maximum of £10k to move. If the challenger banks can't cope with an increase of 5% market share split between them, what is the point of them even setting up?

polymaff

colsten wrote: »

. It's what banks are about, making money from lending.

Quite - but they need lenders at the same rate as they need borrowers. A sudden increase in lenders is just what they don't want.

polymaff

masonic wrote: »

This limit reduction affects 5% of savers. Said customers will have a maximum of £10k to move.

You are assuming that the retail depositors the FSCS refer to only have one £85k or more deposit. A false assumption.

masonic wrote: »

If the challenger banks can't cope with an increase of 5% market share split between them, what is the point of them even setting up?

Again, faulty logic. 5% of the depositors in all FSCS members could easily overload the relatively small fraction that are challenger banks. Challenger banks such as Vanquis, UBL etc. have a viable business model - but it cannot absorb shock deposits.

polymaff

colsten wrote: »

Just look at the MSE article on it.

Have you seen any article anywhere that leads with the £1m cover?

Colsten. Neither my post, or the quote it included, has anything to do with your post.

That said - I believe that we would agree that the answer to your ejaculation is NO.

jimjames

polymaff wrote: »

You are assuming that the retail depositors the FSCS refer to only have one £85k or more deposit. A false assumption.

s.

If the number affected by the £85k limit is 5%, then the number affected by multiples of that limit must be far far smaller. As couple can get £150k now then the numbers are even smaller.