Treasury proposes ending FSCS levy cross-subsidy

The Treasury is proposing setting up separate compensation schemes and ending the current cross-subsidy between different classes of FSCS levy payers.

Its proposal is part of a wider consultation launched today by financial secretary to the Treasury, Mark Hoban MP, on the implementation of financial regulation reforms including the split of the FSA. The FSCS would span both sides of the new structure which is divided into the Prudential Regulation Authority (PRA) and Consumer Protection and Markets Authority (CPMA). The Treasury says the FSCS's core business of compensating consumers for the more frequent failures of small firms, such as IFAs, fits within the remit of the CPMA. However, the role of the FSCS in the event of a fail...