Call for better saver protection
The president of Law Society has called upon the EU Commissioner to provide better legal protection for consumers depositing large amounts of money for short periods, in case a bank collapses.
Robert Heslett said savers with a UK-authorised banks have the first £50,000 of their money covered in the event of a bank's collapse, under the Financial Services Compensation Scheme. But, depositors with EU-registered firms have the first 50,000 euro (£43,300) protected.
Although the limit for EU banks is set to rise to 100,000 euro (£86,700) from the start of 2011, Mr Heslett said that he is particularly concerned about consumers saving large sums for short periods.
He added that people who have deposited a large sum of money from the sale of a property, an inheritance or payments for personal injuries for a short term will not be able to claim compensation if a bank fails.
The Financial Services Authority has launched a consultation on increasing the protection level for such depositors in the UK, but it is helpless if the EU Commissioner does not take the initiative to make changes to the rules.
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