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F S C S Guarantee To Be Increased To 100,000 Euros Equivalent

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http://www.fscs.org.uk/what-we-cover/eligibility-rules/compensation-limits/deposit-limits/

Apols if this has already been covered (I didn't see it), and of course it's of little interest to those who believe we'll have sov. default and hyperwotsit.

Please note:

The current limit for Deposits is £50,000. The FSCS limit for deposits will increase on 31 December 2010 following European legislation to the equivalent in sterling of 100% of the first €100,000 per person per firm.

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I acknowledge that it is only window dressing but could someone advise me if this new limit applies to investment companies as well banks and building societies

I'm afraid I don't know doccyboy. I heard something about this on the radio the other day and just had a look at their website today. You could email them perhaps?

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As the deposit guarantees are removing much of the risk assessment for savers, it is removing a required price signal to judge the value of money. The deposit guarantee is one of the reasons why the banks have played fast and loose, without savers giving a hoot.

I'm assuming they are doing this out of a requirement to synchronise with the EU, rather than a considered choice. If it's the latter, I fear the powers that be haven't learned from the lessons of this crisis. However, I think there are UK politicians who are aware of this problem and there have been white papers discussing narrow banking and the removal of deposit guarantees from all but ultra safe accounts (narrow banks).

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The FSCS compensation scheme of £50k is NOT guaranteed by our government!

Did you know that the FSCS is a Limited Company, backed by the FSA...?

Did you know that the FSA is also a Limited Company ?

The FSA can borrow money from the National Loans Fund (which is a bank account the Treasury has at the Bank of England)

However, the government allows the FSA to make rules relating to borrowing from the National Loans Fund. So, a limited company (which is a private entity) is making the rules as to if and how (our) public money should be used to bail out private investors.

There is no force of law, statute or bill to ensure that the FSCS pay a penny to anyone, and as Limited Companies the FSCS & the FSA can be dissolved/liquidated at the drop of a hat.

Still feel your money is safe ?

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As the deposit guarantees are removing much of the risk assessment for savers, it is removing a required price signal to judge the value of money. The deposit guarantee is one of the reasons why the banks have played fast and loose, without savers giving a hoot.

Exactly right. You could argue that deposit guarantees were a significant contributor to the mess we're in - bailouts for deposit holders led to them chasing yield with the same reckless abandon as the banks themselves. If people only understood that when they deposit money at a bank they are lending that institution (unsecured) funds to do with as they please, then perhaps that extra % or two on offer from the Icelandic banks or whoever might have seemed slightly less attractive. Removing the guarantees completely would help focus minds in this area and would have provided a natural negative feedback loop in the funding of reckless banks.

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Removing the guarantees completely would help focus minds in this area and would have provided a natural negative feedback loop in the funding of reckless banks.

No it wouldn't. The average numpty in the street knows as much about financial affairs as they do brain surgery. They would continue to chase the extra percentage and the country would suffer the consequences.

As I've said before, if paid regulators can't tell the dud banks from good ones, how the 4X do you expect normal people to be able to do so?

tim

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very interesting.

Is the £4.2bn ( or whatever) total liability on the fscs being DOUBLED too?

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No it wouldn't. The average numpty in the street knows as much about financial affairs as they do brain surgery. They would continue to chase the extra percentage and the country would suffer the consequences.

As I've said before, if paid regulators can't tell the dud banks from good ones, how the 4X do you expect normal people to be able to do so?

tim

I suppose they could follow the lead of cigarette packets and drink containers and require a government warning on all adverts etc.

Not that I agree with this, our society is becoming too feminised and trying to remove all risk is not good (or possible)

There will always be fools and greedies. It is only by viewing the disasters that happen to them that the rest of us become more cautious. We are built that way. Darwinism rules in the end.

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The FSCS compensation scheme of £50k is NOT guaranteed by our government!

Did you know that the FSCS is a Limited Company, backed by the FSA...?

Did you know that the FSA is also a Limited Company ?

The FSA can borrow money from the National Loans Fund (which is a bank account the Treasury has at the Bank of England)

However, the government allows the FSA to make rules relating to borrowing from the National Loans Fund. So, a limited company (which is a private entity) is making the rules as to if and how (our) public money should be used to bail out private investors.

There is no force of law, statute or bill to ensure that the FSCS pay a penny to anyone, and as Limited Companies the FSCS & the FSA can be dissolved/liquidated at the drop of a hat.

Still feel your money is safe ?

Wasn't the FSCS created by the Financial Services and Markets Act 2000? It required the FSA to create an independent body to fulfil its obligations to compensate savers.

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Most people won't have anything like 100,000€ in their accounts. By start of 2011, most likely they will be drawing on the last of their savings, as they'll be unemployed or facing wage reductions.

Maybe the FSCS is looking at a big hyperinflation rise in the £ or a collapse of the euro ??? :unsure:

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Looks like the FCCS realise a bit of hyperinflation is on the way. 100,000 Euros will probably buy you a pint and a pie by the time the idiots in charge have finished.

Edited by mentholist

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Most people won't have anything like 100,000€ in their accounts. By start of 2011, most likely they will be drawing on the last of their savings, as they'll be unemployed or facing wage reductions.

Maybe the FSCS is looking at a big hyperinflation rise in the £ or a collapse of the euro ??? :unsure:

:D theres plenty of people with big piles of cash. Everything will be done to protect their cash. Thats how it works.

edited to delete the word wealth and insert the word cash in the second sentence.

Edited by bricor mortis

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  • 259 Brexit, House prices and Summer 2020

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