King attacks protection cap
The current compensation system to protect people’s savings against a bank collapse is inadequate, the Governor of the Bank of England said today.
At present the first £85,000 of an account’s deposit is protected if a bank defaults.
But speaking to MPs and peers on the Commission on Banking Standards today, Sir Mervyn King called for the protection to be extended for those who have large savings for a short period of time, such as when moving house or going through a divorce.
“Does having a simple, absolute limit capture all the people we will care about? My belief is that if you move to the world of retail bank, having an upper limit is something that may be undesirable.”
At the same session, Paul Tucker, Sir Mervyn’s deputy and likely successor, raised a similar concern about the £85,000 cap.