![Risk.net](https://nginx.stage.bb8-risk.uk3.amazee.io/sites/default/files/styles/print_logo/public/2018-09/print-logo.png?itok=1TpHrpuP)
FSA calls on banks to invest £1bn on compensation systems
Daily news headlines
LONDON - The Financial Services Authority (FSA) has called on UK banks to spend an estimated £891.8 million on IT systems to speed up the process of consumer compensation in the event of a bank collapse. The FSA made the suggestion in a new consultation paper recommending enhancements to the existing Financial Services Compensation Scheme (FSCS).
The FSCS acts as the failsafe for deposit holders to the extent of £50,000 if their bank goes bust - as several have or have threatened to do in the past year. The IT recommendation would speed up the flow of information (customers' names and their deposits) from the bank to the FSCS within 48 hours, allowing compensation within seven days.
The FSA makes five suggestions. The first is for the simplification of eligibility requirements for deposit compensation to include all private individuals and small entities. The second is for gross payout, which would ignore any debts the depositor has with the same firm.
Third and fourth are for the firm to hold up-to-date information to allow quick claim processing, and that firms provide information on the existence and basic coverage of the FSCS for deposits.
The FSA also recommends requiring firms to tell consumers which trading names are covered by a particular authorisation. To read more, the consultation paper may be downloaded here.
http://www.fsa.gov.uk/pubs/cp/cp09_03.pdf
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Former NY Fed chief calls for overhaul of discount window
Dudley’s proposed changes include prepositioning collateral, cutting costs of secondary credit facility
Trends in regulatory enforcement in the age of compliance angst
Legal and compliance experts discuss the changing shape of regulatory enforcement and how financial institutions are adapting to a shift in approach
US climate guidance stokes debate over defining material risks
Banks welcome flexibility, but it could lead to big divergence on climate risk management
Levelling the playing field for stablecoins
Regulatory asymmetries are a barrier to innovation in digital payments
Review of 2023: A hard road to a soft landing
Banks and regulators were caught in the crosswinds of the fight against inflation
Climate capital in the balance as EBA rejects green risk weights
European regulator suggests climate change must be factored into existing risk categories
FRTB could put Indian banks at competitive disadvantage
Simplified approach could leave local banks with higher capital charges than foreign branches