Read this article in today’s Torygraph. These are the kinds of decisive steps our highly knowledgeable (and highly paid) leaders should be taking:
telegraph.co.uk/money/main.j … dep102.xml
…raise the compensation limit from the current £35,000 to £50,000 on a "per person, per bank [or building society] basis ".
The Treasury also plans a “faster compensation payout”, with "a target of seven days for providing depositors with access to at least a proportion of their funds, and the balance within the following few days".
It is hoped that the measures will give customers sufficient confidence to leave their protected deposits with a troubled lender, avoiding a run on a bank .
The proposals are a key plank of the Treasury’s strategy of “reducing the likelihood of bank failure”.
The Treasury has alreadymapped out a special resolution regime that will allow regulators to take control of a failing bank . Under the powers, it proposes to introduce new liquidity thresholds that trigger regulatory intervention alongside existing capital requirements.
The Bank of England will also be given powers to provide banks with liquidity in secret because “there are circumstances where inappropriate disclosure can hamper the effectiveness of assistance offered”. In addition, building societies are to be brought under the liquidity support and special resolution regime.
Anyone from the Central Bank/IFSRA/Dept. Finance who’s reading this: you would want to look east for ideas cos you don’t seem to have any ideas of your own.
xman
July 2, 2008, 4:53pm
2
I have a friend who got caught up in some Cork stockbroking firm that collapsed due to fraud around 2001.
I’d say it took about 3-4 years before he got some money back.
I hope the Government’s deposit guarantee system is a bit better if a bank folds.
I think this is essential before the situation deteriorates any further but I don’t think it will happen till its too late.
And the irony being, that a 100% €100K or even €500K system will cost the government nothing (because it will not be needed), while the current system will see them throwing money at a bank in trouble, and trying to keep it afloat as the depositors run away.
ragingbear:
And the irony being, that a 100% €100K or even €500K system will cost the government nothing (because it will not be needed), while the current system will see them throwing money at a bank in trouble, and trying to keep it afloat as the depositors run away.
It might be too late. Could have been a great boost to introduce above policy during last year’s budget.