Tuesday, February 27, 2024

Credit Suisse: Banking shares drop after Credit Suisse takeover – BBC News

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The question of whether ordinary people’s savings are safe was a common query during the banking crisis of 15 years or so ago – and whenever there are signs of a run on a bank.

Things are even more secure for savers than they used to be. Banks are now required to be in a stronger position to withstand a shock. Savings protection have also been strengthened.

Savings security is not affected simply when a bank’s share price falls. In the highly unlikely scenario that a bank or building society actually collapses, then deposit protection is in place.

In the UK, that means £85,000 per person, per institution is protected (or £170,000 in a joint account). So, if you have £85,000 in one bank, and another £85,000 in a separately licensed bank, then it is all safe if both went bust, under the Financial Services Compensation Scheme. There is also a higher temporary limit of £1m for six months, if you get a sudden influx of funds, such as an inheritance.

Protection is similar in the EU, and the US government has safeguarded deposits of up to $250,000 for a long time.

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