Commenting on government proposals to reform the banking system and increase protection for savers, John Cridland, CBI Deputy Director-General, said: “We support the suggestions not to move to a pre-funding of the depositor protection scheme, at least at this stage, as this would take ages to build up to an amount which would deal with a failure of any size.
“The UK’s current £35,000 scheme limit covers over 96% of deposits by number and is in line with limits elsewhere, and we did not therefore see an overriding need to increase the limit significantly.
“The proposal to give the FSCS access to immediate liquidity through the National Loans Fund is entirely sensible.”
The Investment Management Association (IMA) has also welcomed the move but wants it all to be implemented quickly.
Richard Saunders, chief executive at the IMA said: "The proposals are welcome confirmation of the Government's intention to carry through two much needed reforms. The first is the new, higher level of depositor protection, which is essential to maintain the confidence of ordinary depositors. The second is the Special Resolution Regime, which will allow depositors in any bank which fails in future continued access to their money while the affairs of the bank itself are settled. Both need now to be implemented and implemented quickly.”
