If Worst Came To The Worst !

planemad

Lets say a foreign bank went down for example ICESAVE and they could not give savers back their monies.
They hold £5bn of UK savers money.

How would the FSCS be able to pay this money back to the depositors, do the FSCS hold this sort of liquid? or is it underwritten by an insurance company?

deaglecat

not much liquidity in FSCS afaik... basically there is funding via a levy on banks - which is fine in the case of isolated (and small) bank default but if something bigger e.g. like an RBS going kaput... then you rely on the polical unacceptability of a UK bank default and a treasury step-in.

NRK required a lot of cash and was relatively small. RBS... say... much bigger and has a vested interest in stopping a systemic failure / supporting the monolines - hence the rumour of rescue package for the US bond insurers.

as ever DYOR.