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Monday, October 20, 2008

Konjunktura nepabegs - keeping money in safe havens 

‘The market will not go away’ a statement true in any language (in this case Lithuanian) because the dynamics of self-regulating systems adapt to any constraints regardless of what we may want to happen. So with the proliferation of bank deposit protection schemes, market awareness is leading to a scramble by some voluntary organisations to shift accounts between institutions to make sure that their money is spread between accounts that are individually covered to the maximum £50,000 This is quite a disruptive process…

With all the takeovers and so on there doesn’t seem to be a readily available roadmap though. Most people know that the Co-Operative bank owns SMILE online bank, so if you have a deposit in both you are ‘only’ covered to a maximum of £50,000 as the sum of both accounts. Useless to open anew account in one if you already have an account in the other. But if a bank now takes over another and you had deposits in both your maximum coverage is halved –and many may not realise this. Is the banking industry making this shift transparent?

Not all organisations seem to be covered by FSCS though. Are we in any way protected as a party for our party accounts?

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