PRA consults on deposit protection increase

PRA is consulting on increasing the deposit protection limit back to £85,000. The limit was decreased from £85,000 to £75,000 in July 2015 because of the Deposit Guarantee Schemes Directive’s requirements on non-euro currencies and would normally be subject to a five year review period. However, limits must be adjusted within that period if there are relevant unforeseen events. PRA considers the effects of the Brexit vote on exchange rates have been sufficient to cause a structural shift in the exchange rate. As a result, it wants to restore £85,000 as the equivalent of €100,000 (the amount the Directive says Member State schemes must cover) with effect from 30 January 2017. It asks for comments by 16 December and, if it makes the change, would give firms until 30 June 2017 to make changes to their systems and materials.

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