FSCS discussion

bluemeanie

As I understand it, banks and building societies pay a proportion of their deposits into the FSCS to provide a fund to protect depositors in the event of a financial institution going bust.

Do the percentages paid vary according to an institution's perceived risk of default? If not, this seems grossly unfair on those institutions with an extremely strong balance sheet. It is akin to a boy racer in his suped up BMW paying the same insurance premium as my Mum in her Nissan Micra!

Some of the institutions offering the headline savings rates at the moment are doing so because other sources of funding are more expensive to them (due to their perceived default risk).

How much money is in the FSCS kitty now? - how would it compare to the deposits held by some of those institutions that have been lending aggressively or who have made some very unwise investments in the past few years ?

I'm not scaremongering, just starting a discussion.

Meltdown_2

see
http://www.fscs.org.uk/industry/funding/

and other related web pages within the site. (There is too much to quote.)

dunstonh

Every financial services company pays towards it. I pay an amount every year for example.

Within the industry it is seen as unfair at times as many of the good firms are paying for those that have used limited liability status to shirk their liabilities onto the FSCS. There are also other levies made in addition to things like Pensions review (also unfair as firms that didnt mis-sell or didnt exist at that time still have to pay that levy), the FOS and the FSA.