Financial Services Compensation Scheme

Treasury written question – answered at on 30 June 2009.

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Photo of Colin Challen Colin Challen Labour, Morley and Rothwell

To ask the Chancellor of the Exchequer

(1) which organisations have received funding from the Financial Services Compensation Scheme; and how much each has received;

(2) which organisations have provided funding for the Financial Services Compensation Scheme; and how much each has provided.

Photo of Sarah McCarthy-Fry Sarah McCarthy-Fry Parliamentary Secretary, HM Treasury

The Financial Services Compensation Scheme (FSCS) was required to make payments to Abbey National and ING Direct in order to transfer retail deposits, up to the FSCS deposit compensation limit, from Bradford and Bingley and the UK subsidiaries of certain Icelandic banks. In addition, the FSCS is paying compensation directly to retail depositors with the UK branch of Landsbanki and the London Scottish Bank in accordance with the scheme rules.

The FSCS is ordinarily financed by levies on the financial services industry collected in accordance with the scheme rules. However, in order for the FSCS to make the above payments the Treasury has provided loans to the FSCS.

Details of the above compensation payments including Treasury's loans to the FSCS are set out in the Budget report published on 22 April 2009. The amount outstanding on the Treasury's loans to the FSCS as at 31 March 2009 will be published in the Treasury's Resource Accounts for 2008-09.

The FSCS also paid additional amounts on behalf of the Government and the Icelandic deposit-guarantee scheme to ensure that retail depositors with the UK branch of Landsbanki and the London Scottish Bank were fully compensated. Funds to meet this expenditure have also been provided to the FSCS, by the Treasury.

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