MSE News: Chancellor faces renewed call to prevent 'absurd' savings protection cut

2010

If the banking system was rock solid as it should be, all amounts would be covered.

masonic

2010 wrote: »

If the banking system was rock solid as it should be, all amounts would be covered.

All amounts are covered if you save with NS&I. That option is open to anyone who wants protection on funds above the FSCS limit.

2010

masonic wrote: »

All amounts are covered if you save with NS&I. That option is open to anyone who wants protection on funds above the FSCS limit.

Apart from the "pensioner bonds" which have been closed since May they haven`t got anythng worth taking out.

dunstonh

VT82 wrote: »

You really think rich Belgians would move money into British banks, suffering exchange rate risk, and comission costs in both directions, for the sake of another £10k of FSCS protection? I guess that's why so much cash was flooded into Irish banks when the Irish Government moved to guarantee 100% of deposits - not!

The logic IS flawed - because it ignores the all-important fact that British savers don't care what they are covered for in Euros - they care what they are covered for in GBP. And anyone ignoring this fact for the sake of maintaining the status quo / rich-bashing / lazy-bashing is being deliberately obtuse.

This is what the EU said in the directive (in some snippets)

In the recent financial crisis, uncoordinated increases in coverage across the Union have in some cases led to depositors transferring money to credit institutions in countries where deposit guarantees were higher. Such uncoordinated increases have drained liquidity from credit institutions in times of stress. In times of stability it is possible that different coverage leads to depositors choosing the highest deposit protection rather than the deposit product best suited to them. It is possible that such different coverage results in competitive distortions in the internal market. It is therefore necessary to ensure a harmonised level of deposit protection by all recognised DGSs, regardless of where the deposits are located in the Union. However, for a limited time, it should be possible to cover certain deposits relating to the personal situation of depositors at a higher level.

While harmonisation is essential in order to secure the level playing field and financial stability in the internal market, risks of undermining depositor confidence should be taken into account. Therefore, Member States should be able to apply a higher coverage level if they provided for a coverage level that was higher than the harmonised level before the application of Directive 2009/14/EC.

Member States that convert into their national currency the amount referred to in paragraph 1 shall initially use in the conversion the exchange rate prevailing on 3 July 2015.
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This was all agree and known about. Standardisation which led to the increase in the deposits scheme in the UK was a good thing. Any lazy-bashing of it is being deliberately obtuse.

masonic

2010 wrote: »

Apart from the "pensioner bonds" which have been closed since May they haven`t got anythng worth taking out.

All the accounts with a decent rate of interest only pay interest on a limited balance anyway, nowhere near the FSCS compensation limit. Other than those "loss leader" high interest current accounts, all rates are rubbish, For those who are holding massive amounts in cash temporarily, the difference in interest earned is not going to be material.

I've no sympathy for those hoarding huge sums in cash long term who are too lazy to spread it between two or more accounts, yet demand a high rate of interest.

redux

Jsscmm wrote: »

That isn't why this is being highlighted. It's being highlighted to do some EU bashing in advance of the referendum.

That can't be right.

Tyrie's name appeared as signatory on a certain Eurosceptic letter lest year, but then he insisted he hadn't signed it.

The Bruges Group has a scoring system for how your MP voted on their favourite Euro issues. His is minus 14%.

Mind you, if they re-rated him over 2 or 3 years instead of 5, his score would be positive.

talexuser

dunstonh wrote: »

The limit was increased by the EU compared to the UK level previously. If it was good enough then, why not now?

One suggestion.... inflation?

dunstonh

talexuser wrote: »

One suggestion.... inflation?

A good suggestion. 5 years is a good timescale to have an inflation increase. it is something a sensible politician should be campaigning for with the EU.

talexuser

PeacefulWaters wrote: »

Both those examples included a 100% return of all cash over and above the FSCS limit at the time.

You're absolutely correct, but I thought the "reforms" (i.e not splitting retail from gambling but printing money to refinance broke banks) were supposed to get to the point where bailouts should not be necessary again, either from taxpayers or the FSA insurance fund, although smaller building socs or credit unions should be safely accommodated without too many ructions.

masonic

dunstonh wrote: »

A good suggestion. 5 years is a good timescale to have an inflation increase. it is something a sensible politician should be campaigning for with the EU.

There's not much point trying to raise the savings compensation limit with one hand when, with the other hand, they are holding down the FSCS compensation limit for investments at £50,000.