Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/wealth-manager/article/a659663
IMA: Banks should pour £165m into FSCS pot
by Sarah Miloudi on Feb 18, 2013 at 13:29
Banks should have their Financial Services Compensation Scheme (FSCS) contribution raised to £165 million, the Investment Management Association (IMA) has said.
In its response to the Financial Services Authority's FSCS funding review, the IMA said fund managers make contributions based on what they can afford, while other providers' contributions are based on fees.
The IMA said this leaves fund management firms open to the risk of paying a cross-subsidy three times as large as insurers.
Based on a series of calculations, the IMA said: 'This should be reviewed and the cap for general insurance firms' cross-subsidy into the pool raised to £52 million, for life insurance to £105 million, and for banks it should be raised to £165 million.'
Once the FSA has been dissolved, the Prudential Regulation Authority and Financial Conduct Authority (FCA) will share the supervision of the City and its practices, with the FCA looking after consumers' interests, including the FSCS.
The IMA said while it is pleased PRA-regulated firms, typically deposit takers and firms that could pose a systemic risk, will contribute to the FSCS under the proposals put forward in the compensation scheme's review, more could be done.
It said there was still room to 'further strengthen' the FSCS, particularly the size of contributions and the certainty of these.
News sponsored by:
Today's top headlines
More about this:
Aberdeen Live supplement: Fundamentals point to ongoing flows and solid returns from EMD
After a record year for inflows and market-leading performance in 2012, emerging market debt has taken a large step towards the mainstream. Our recent debate covers the outlook for the asset class this year and where opportunities can be found.
On the road
by Dylan Lobo on Jun 19, 2013 at 09:33