7 Oct 2014
The following expenditures depositors house sales and personal injury temporarily sitting balance has extra large coverage if their bank fails.
The Bank of England said on Monday that the Financial Services Compensation Scheme protection will be increased from a maximum of £ 85,000 to as much as one million pounds to cover those short hold large bank account.
BOE also introduced new rules to minimize the accounts, if the lender to the next, to prevent Northern Rock-style panic. Our goal is to be quickly transferred to either accounts, rather than the current 20 days, the new solvency of banks or paid to customers under the FSCS were not more than seven days.
Protection for certain categories of policy holders are also set to be enhanced, including the provider can not cover the situation. Restrictions, increased by 90% to 100% coverage of annuities, death or incapacity, as well as professional indemnity insurance claims.
These reforms aimed at reducing the financial failure, the risk of panic and confusion. In 2007 depositors queuing outside Northern Rock bank branches scene prompted one of the most serious banking crisis in the country.
Andrew Bailey, head of the Bank of England's Prudential Regulation Authority, said: "These proposals will enable customers to continue to receive the money in their bank accounts - or receive payment from the FSCS, if this is not possible.
"In addition, increasing the FSCS limit certain types of insurance will mean that policyholders who may be difficult to obtain alternative cover, or who are locked into a product with greater protection, if their insurer will fail."
Deposit guarantee protection overhaul is in response to the new EU requirements, which means that large non-financial companies will also be eligible for the program the first time.
Higher personal savings insurance will cover the customer is six months. The new £ 1 million ceiling will protect 99% of home sales in England and Wales, and 92% in London, the purpose is no longer the need for customers to make their deposits in several accounts remain in the £ 85,000 limit. In personal injury protection expenditures will be unlimited.
BOE also introduced the case needs to be quickly transferred to the account of failure, healthy loans to ensure that customers can continue to withdraw their money, with their card rules. Account shift will occur within 24 hours, to avoid customers having to wait for a few days in damages.
These measures will lead to higher costs in the industry. Changing between deposit guarantee security and streamline access bank accounts will result in 250 m and £ 390 m, and 35 million pounds and 50 million pounds of annual fee one-time fee.
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