7 The UK Deposit Insurance Framework

Subject(s):

Deposit insurance schemes — Deposit protection schemes — Bank of England

The Financial Services Compensation Scheme, the UK’s deposit insurer, has been subject to a broad overhaul during the last few years. This chapter divides these regulatory developments into three phases: (a) the creation of the first explicit deposit protection scheme; (b) the series of reforms that took place in 2000 and the creation of the FSCS as a single protection scheme for financial institutions; and (c) the post-2007 era during which main changes include the creation of the Prudential Regulation Authority and Financial Conduct Authority as two separate regulators, and further strengthening of deposit insurance arrangements. The chapter concludes that key deposit insurance design reforms are still missing from the UK regime.