2023-04-28 08:25:38
The UK Treasury and the Bank of England are considering reforms that would allow uninsured depositors to have immediate access to their funds in the event of the failure of the bank where their money is held. This is with reference to sources in the British government reports Bloomberg.
According to the agency, British regulators thought regarding this initiative following the bankruptcy of the American Silicon Valley Bank (SVB) in March this year. Then the British division of SVB was bought out by HSBC for a symbolic sum of £1. However, of the £6.7 billion on its deposits, only £155 million were insured. And if the British authorities decided not to save the bank, but to declare it insolvent, then the owners of the insured deposits would have to wait a week to get access to their funds. , and uninsured – months until the authorities would not be able to sell the assets of the collapsed bank and send the proceeds to pay off debts to customers.
Now the British authorities want the clients of bankrupt banks to be able to receive payments within a few hours. With insured deposits, everything is simple – they must be reimbursed in full. The government proposes to return uninsured deposits to customers also within a few hours following the announcement of the bank’s bankruptcy, but not in full. This can be done, for example, at the expense of budgetary funds, which will be returned to the state treasury following the sale of the bank’s assets.
According to Bloomberg, while negotiations on this issue are at an early stage. The Treasury and the Bank of England declined to comment.
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