The Financial Services Authority (FSA) has proposed alterations to the funding of the U.K. Financial Services Compensation Scheme (FSCS), increased in value to cover up to GBP 85,000 for individual retail bank customers in the U.K. in event of a bank failure. Further, the FSA has also imposed a centralised guarantee and technology reporting function through which a shared technological solution covering all banks in the U.K. will provide a compensation plan within seven days.
The FSCS funding model review elucidates what FSA purports to be a credible funding approach, balancing the need for adequacy of funds with affordability for those contributing. A compensation scheme needs to be in place to build upon consumer confidence, according to the FSA.