View more on these topics

FSCS issues £406m levy for banking failure

The Financial Services Compensation Scheme has sent invoices to banks, building societies and credit unions for the initial levy of £406m for compensation costs incurred following the five bank defaults of 2008.

The FSCS says the levy must be paid by September 1.

The levy is in respect of the interest charges on the loans the FSSC used to fund its compensation payments to customers of Landsbanki, Bradford and Bingley, Heritable, Kaupthing Singer and Friedlander and London Scottish Bank.

FSCS costs for the defaults were funded through loans from HM Treasury on an interest only basis for the first three years. The Scheme will use any recoveries received to repay the principal.

It will start repaying the outstanding principal, net of any recoveries, in 2012, according to a repayment schedule it will agree with HM Treasury in the light of prevailing market conditions at the time.

FSCS chief executive Loretta Minghella says: “Today’s announcement confirms that this first levy will be £406m, which is in line with our estimate announced in March. Whilst we recognise that the levy comes at a difficult time for firms, it is also clear that the FSCS plays a central role in helping promote consumer confidence in financial services which benefits the whole industry.”


Top title

Money Marketing once again triumphed in the PIMS readership research of top-end financial advisers, comprehensively retaining the crown of top weekly IFA newspaper. The research shows the paper is the most well read and credible weekly title and has the best coverage by a considerable margin. We would like to thank our readers for helping us to stay number one.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm