Levies rise to fund collapses

The UK’s safety net will increase, and could extend to wholesale firms

The size of the Financial Services Compensation Scheme (FSCS) is to be enlarged following a two-year review of the funding requirements backing the UK’s safety net scheme for the customers of financial services firms in default. According to a paper published by the Financial Services Authority (FSA), the current system whereby defaults are contained within sector groups will be disbanded for claims that exceed the thresholds and firms will form a general pool to cover the shortfall where individual limits have been exhausted.