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laurejon

Brown Bungles Fsa Depositors Protection Scheme

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Its time to unravel a mess.

Interesting that the FSA and the banks will no longer be financing this arrangement, it will be the working class taxpayer (as they are as you all know the only people paying tax in the UK) via the National Loans Scheme.

After countless takeovers, countless selling on of bad debts to other banks, its important for you to find out first is your bank account a UK account, secondly would you be covered by the FSA.

The last paragraph will be most disturbing to many many people, shift your savings away from the bank you have a mortgage with, or a loan otherwise you could find yourself having to pay off your mortgage 25years earlier than anticipated.

Protection for savers flawedElizabeth Colman

MPs will grill Treasury officials later this month over holes in the new compensation scheme for failed banks, announced by the government last week.

Michael Fallon, the Conservative vice-chairman of the Treasury Select Committee, said “serious gaps” still existed within the Financial Services Compensation Scheme (FSCS) in spite of improvements proposed by the Treasury, the Bank of England and the Financial Services Authority (FSA) last week.

The key proposal is to increase the amount of savings guaranteed by UK banks from £35,000 to £50,000 — short of the £100,000 mooted after the run on Northern Rock last year.

Fallon told The Sunday Times: “We shall be quizzing Treasury officials in the second half of July. We shall ask them why depositors in some Icelandic banks, for example, are not fully protected under our scheme.

“It is extraordinary that Danish housewives are entitled to recover the full amount of their savings with Northern Rock but UK savers who have deposits in Icelandic banks are not entitled to the same protection.”

According to the report, any changes will not require banks to fund the scheme upfront — unlike the US, where the industry has contributed $50 billion (£25 billion) to a compensation “pot”.

We answer your questions about the scheme.

What is the government proposing?

The “lead option” in the Treasury report is to increase the limit on savings guaranteed by the compensation scheme to £50,000 from £35,000.

The report also proposes that the Bank of England be allowed to take control of any bank that is in trouble.

Any other improvements?

Easier and faster compensation payments.

How will it be funded?

Banks regulated by the FSA will fund the compensation. The scheme may also be allowed to borrow from the public sector via the “National Loans Fund”.

I have my savings in a foreign bank, am I covered?

It depends which bank you have your savings with. For example, Icesave, ING Direct, First Save and AK Bank are only partly covered.

Savers who have deposits in such banks must first apply to the scheme in the account’s “home country”, or to the EU scheme.

What if I have multiple accounts with one bank?

Advisers urge customers who have multiple accounts with one institution to limit their deposit to £35,000 at present. Savers also need to check which bank actually owns their account.

I have savings and loans with the same bank — is my situation different?

Yes. Savers only receive “net” compensation under the FSCS at present. The net balance is calculated by deducting the amount of a mortgage, loan or credit card debt from any savings.

Edited by laurejon

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. . . . shift your savings away from the bank you have a mortgage with, or a loan otherwise you could find yourself having to pay off your mortgage 25years earlier than anticipated.

Protection for savers flawed - Elizabeth Colman

Do you have a link?

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Do you have a link?

Lauriejon never follows basic netiquet. Dunno why his posts are still allowed myself..perhaps the webmaster would care to comment on board rules.

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Its time to unravel a mess.

Interesting that the FSA and the banks will be financing this arrangement, it will not be the working class taxpayer (as they are as you all know the minority people paying tax in the UK) via the National Loans Scheme.

After few takeovers, minor selling on of bad debts to other banks, it's forgone to find out first is your bank account a UK account, secondly would you be already be covered by the FSA.

The last paragraph will be comfort to many people, keep your savings with the bank you have a mortgage with, or a loan otherwise you could find yourself having to pay off your mortgage 25years earlier than anticipated.

Couldn't agree more, class post well researched.

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Lauriejon never follows basic netiquet. Dunno why his posts are still allowed myself..perhaps the webmaster would care to comment on board rules.

I think Laurejon is reluctant to post links when quoting true articles as he also likes to make up satirical non-existent articles, and doesn't want it to be too obvious which is which.

I think he's entertaining enough that, as far as I'm concerned, he's welcome to continue this idiosyncratic approach.

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According to the report, any changes will not require banks to fund the scheme upfront — unlike the US, where the industry has contributed $50 billion (£25 billion) to a compensation “pot”.

It's hard to say how this scheme could be realistically and adequately funded but I'm not convinced that the US arrangements provide an ideal model. In the following link Chris Martenson quotes the FDIC's own figures, showing that 1.22 % of deposits are covered with little in the way of concrete procedures for an instance where that proves to be inadequate.

http://www.chrismartenson.com/how-safe-my-...ed-bank-account

Invoking such guarantees on either side of the Atlantic may prove to be lengthy and complicated. Whatever form the scheme eventually takes, it may be unwise to let it lead to complacency.

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  • 395 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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