EU Moves to Protect Taxpayers from Failing Banks
Fearing that another bail out of failed banks using taxpayers’ money would take place, the European Commission will today bare plans to protect the public from such circumstance.
The proposals are primarily aimed at making bank shareholders and creditors liable to any losses while minimizing the impact on taxpayers. The EU wants that basic banking operations such as in ATM will continue in the event that another financial crisis will occur.
The move comes hot on the heels of the assurance offered by the inancial Services Compensation Scheme (FSCS) to similarly protect savers in UK.
The continuing debate about the future of the Euro may be worrying for UK savers but they can rest assured that they are protected, the FSCS said.
The FSCS protects people who place their money with UK authorised firms. Since 2001, FSCS has paid out more than £26bn and helped more than 4.5m people.
The FSCS protects investments, insurance and savings. This includes the money you have in UK banks, building societies and credit unions. The £85,000 deposit limit per means FSCS safeguards the overwhelming majority of people.
It is a personal allowance so a joint account would have protection up to £170,000 per authorised institution. FSCS aims to pay the majority of savers back within seven days of a firm failing.
European banks operating branches in the UK under European directives are covered by the compensation scheme in that country. The current European limit for banks is €100,000.