Nationwide protests over FSCS bill
The Nationwide building society has issued a stark warning to the Financial Services Authority with regards to the £250 million bill the society has been hit with for its share of the Financial Services Compensation Scheme. The scheme is being put together to ensure that deposits up to £50,000 are guaranteed thereby giving some more backbone to the UK banking system. However, the Nationwide building society is arguing that the scheme is disadvantageous for low risk lenders such as building societies.
The £250 million bill which the Nationwide has been hit covers the next three years but the formula used to calculate a particular financial institutions share takes into account the size of funds held on deposit. However, quite rightly, the Nationwide is arguing that the vast majority of building societies are low risk lenders as they depend upon deposits in the main to cover their everyday business finance. Even though the regulations regarding building societies use of money markets have been reduced of late they offer nowhere near the same risk as the average UK bank.
Whether the Financial Services Authority will take the arguments of the Nationwide into account in the future remains to be seen but one thing is for sure, the overall cost of the compensation scheme is likely to be borne by banking customers in the UK.
Share this..
Related stories
Tesco sets its sights on the financial sector
After reporting pre-tax profits of £1.42 billion for the six months to August 29, only fractionally up on last year's figure, Tesco has revealed plans to attack the UK financial sector and in particular the UK banking industry. Hot on the heels of a decision by the competition commission to block many new store applications and expansion plans, it would seem as though leading UK supermarkets are...
Read MoreComplaints about switching bank account up, but scale of problem is small
The British Bankers' Association (BBA) has sought to reassure consumers after the Financial Ombudsman Service recently disclosed that complaints about moving current accounts from one bank to another have risen by 50 per cent in the last year.The number of complaints about switching current accounts has gone up from 1,200 to 1,800, but the BBA said that this was still only a problem for "a very ti...
Read MoreFTSE 100 ends a winning streak
The FTSE 100 today fell just under 40 points ending a five-game winning streak which has seen the index push above the level last seen prior to the Lehman Bros collapse. Mining stocks and banking stocks were the main losers today pulling the market down despite a number of sectors remaining fairly buoyant. It will be interesting to see how the markets react to a reduced trading period tomorrow bec...
Read MoreComplaints to water companies fall for 7th consecutive year
18/09/2015 Complaints to water companies fell by 13.4% this year, which is the seventh year in a row that complaints have fallen. The Consumer Council for Water revealed that suppliers in England and Wales faced 106,693 complaints in 2014-15, which is a 13.4% drop on the previous year. The majority of the complaints (60%) were about billing and charges. The Consumer Council for Water has...
Read MoreFSA attacks the UK government
In a sign of the times and they fast changing UK regulatory environment, the Financial Services Authority (FSA) has today launched a ferocious attack on the UK government. Under pressure from all sides regarding the "watering down of regulations" regarding banking bonuses and remuneration packages the FSA has again repeated the fact that it is not up to the regulator to cap bonuses and remuneratio...
Read More