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Beale urges progress on FSCS levy reform

Building Societies Association outgoing chairman Graham Beale has slammed the lack of progress on reforms of the Financial Services Compensation Scheme levy, describing it as “a moral hazard that must be corrected”.

Beale
Beale: FSCS levy is ‘moral hazard’

Speaking at the BSA annual conference, Beale said it is disappointing that the FSCS had not been revised for societies as they rely mainly on retail funding.

He said: “We are no further forward than we were a year ago in our calls for a revision to the Financial Services Compensation Scheme.
“We have more retail funding than any other group of institutions in the UK. Then, perversely, we have to pay disproportionately more for the failure of banks based in Bingley and Iceland. This is a moral hazard that needs to be corrected. It is not right that the prudent pay for the mistakes of the imprudent.”

He added that the BSA will be keen to play a role in the review of FSCS funding, which the FSA says it is committed to undertake in the next couple of years.

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