The FSA wants to make it obligatory for all banks, building societies and credit unions in the UK to prominently display how much compensation savers could claim in the event of an institution failing and where from.
This information would be shown in every branch and all websites.
The proposals published today will require each FSA-authorised bank or building society based in the UK to state that: ‘Your deposits are protected up to £85,000 by the Financial Services Compensation Scheme, the UK deposit protection scheme. Any deposits you hold above this amount are not covered.’
Banks with branches in the UK, but headquartered and authorised in the European Economic Area (EEA), will have to state that deposits held with them ‘are not protected by the UK Financial Services Compensation Scheme.’ They will also have to state which other national scheme is providing the protection.
The regulator says that the proposed changes are designed significantly to reinforce existing deposit protection measures and will ensure that every customer can clearly see how much of their money is protected, how much is not and whether they are covered by the UK compensation scheme.
Hector Sants, CEO of the FSA, said: “It is vitally important that customers have confidence in the banking system and that is why we are taking this step of making it obligatory for firms to prominently display compensation information. Consumers must understand how their money is protected and be clear about the limits – any money over £85