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  • FIRST POST
    • MSE Lucinda
    • By MSE Lucinda 19th Jan 17, 10:33 AM
    • 46Posts
    • 6Thanks
    MSE Lucinda
    MSE News: Savers to benefit from increased protection in the event of...
    • #1
    • 19th Jan 17, 10:33 AM
    MSE News: Savers to benefit from increased protection in the event of... 19th Jan 17 at 10:33 AM
    The level of protection for individual savers with money in banks and building societies that go bust is set to increase to 85,000, the Financial Services Compensation Scheme (FSCS) has confirmed...
    Read the full story:
    'Savers to benefit from increased protection in the event of banks going bust'

    Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.
    Last edited by MSE Luke; 19-01-2017 at 4:00 PM.
Page 1
    • Consumerist
    • By Consumerist 19th Jan 17, 11:38 AM
    • 5,241 Posts
    • 2,624 Thanks
    Consumerist
    • #2
    • 19th Jan 17, 11:38 AM
    • #2
    • 19th Jan 17, 11:38 AM
    Once we have left the EU will this protection be reduced to its level before the EU imposed the 100,000 level on us?

    If I remember correctly, the original protection was at about 35,000.

    Whist I'm generally in favour of Brexit, I do fear the consequences of our parliament having unfettered control of our consumer legislation.
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • alanq
    • By alanq 19th Jan 17, 12:02 PM
    • 4,154 Posts
    • 2,733 Thanks
    alanq
    • #3
    • 19th Jan 17, 12:02 PM
    • #3
    • 19th Jan 17, 12:02 PM
    If I remember correctly, the original protection was at about 35,000.
    Originally posted by Consumerist
    It was 31,700. (100% of 1st 2000, 90% of next 33,000)
    • 2010
    • By 2010 19th Jan 17, 12:15 PM
    • 4,248 Posts
    • 3,365 Thanks
    2010
    • #4
    • 19th Jan 17, 12:15 PM
    • #4
    • 19th Jan 17, 12:15 PM
    Why would it go down if the banks are as strong and stress tested as they say they are?
    • nbrewitt
    • By nbrewitt 19th Jan 17, 12:19 PM
    • 44 Posts
    • 24 Thanks
    nbrewitt
    • #5
    • 19th Jan 17, 12:19 PM
    • #5
    • 19th Jan 17, 12:19 PM
    Whilst I welcome the move, would it ever really be required? I imagine most of the major savings providers would never get into a Northern Rock type situation again, would they?
    • ColdIron
    • By ColdIron 19th Jan 17, 12:34 PM
    • 5,427 Posts
    • 7,427 Thanks
    ColdIron
    • #6
    • 19th Jan 17, 12:34 PM
    • #6
    • 19th Jan 17, 12:34 PM
    It's already paid out 28 billion, Bradford & Bingley etc
    • 2010
    • By 2010 19th Jan 17, 3:09 PM
    • 4,248 Posts
    • 3,365 Thanks
    2010
    • #7
    • 19th Jan 17, 3:09 PM
    • #7
    • 19th Jan 17, 3:09 PM
    Whilst I welcome the move, would it ever really be required? I imagine most of the major savings providers would never get into a Northern Rock type situation again, would they?
    Originally posted by nbrewitt
    So you would actually trust the banks to behave themselves?

    They still need a lot tighter regulation than even now.

    Their retail banking should be entirely ring-fenced and separated from their "gambling" investment side.
    • VT82
    • By VT82 19th Jan 17, 3:21 PM
    • 1,050 Posts
    • 889 Thanks
    VT82
    • #8
    • 19th Jan 17, 3:21 PM
    • #8
    • 19th Jan 17, 3:21 PM
    Once we have left the EU will this protection be reduced to its level before the EU imposed the €100,000 level on us?

    If I remember correctly, the original protection was at about 35,000.
    Originally posted by Consumerist
    It was 31,700. (100% of 1st 2000, 90% of next 33,000)
    Originally posted by alanq
    It was 50k (effective 7th October 2008 to 31st December 2010). But the Government will be able to choose what it wants to do with the FSCS threshold. I think more likely to go up than down. They hated having to put it down from 85k to 75k.

    Also, UK banks will likely continue to follow the European Banking Authority's regulation for a long time after Brexit, including the liquidity stress testing framework, to facilitate inter-bank dealing. Part of this liquidity framework is predicated on there being increased riskiness of unprotected deposits. A lower FSCS means more unprotected deposits, which means higher liquidity requirements for banks, so more liquidity holding costs, and banks less profitable. Not going to happen.

    the saver can make a claim through the FSCS
    by MSE
    MSE, this is misleading and unduly worrying to the reader. Payouts under the FSCS will typically be automatic and paid within 7 days.
    • phillw
    • By phillw 20th Jan 17, 12:34 PM
    • 2,763 Posts
    • 2,325 Thanks
    phillw
    • #9
    • 20th Jan 17, 12:34 PM
    • #9
    • 20th Jan 17, 12:34 PM
    But the Government will be able to choose what it wants to do with the FSCS threshold. I think more likely to go up than down. They hated having to put it down from 85k to 75k.
    Originally posted by VT82
    The UK government has become very good at happily going along with the EU but then telling us that they are unhappy about it (or even just making stuff up about the EU). They tell us that employment rights won't be eroded during brexit, but they have been fighting (and losing) in the European courts to remove employee rights for years. So I don't believe it's more likely to go up.

    If the government get rid of all the red tape, like they say they will, then the main difference is that the threshold won't change when sterling vs euro changes. I'm not sure how many saver "benefit" from this, most people are worse off because of this news as it means that sterling has slumped and any money you have in the bank is now worth less. I'm therefore hoping for decreased protection in the next two years.
    Last edited by phillw; 20-01-2017 at 12:36 PM.
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