Prudential regulations authorities have increased the amount of international bank cash, as nearly one-third of the deposits covered by the UK compensation scheme.
The Bank of England has increased its existing £100 million and £500 million threshold deposits (covered by the Financial Services Compensation Scheme) by 30%.
The agency said the lower threshold was introduced in 2014, while the higher threshold was introduced in 2018.
Since then, inflation has increased by about 30% in both cases, thus raising the threshold to £130 million and £650 million respectively.
“The PRA believes that the possible increase in FSC coverage sediments in branches may not pose an undue risk to their primary objectives of safety and robustness,” the agency said.
It added: “PRA believes that doing so will promote the secondary goal of the PRA to promote competitiveness and growth of the UK economy by providing branches with greater room for deposit growth and making the UK a more attractive place to build and expand banking.”
The agency also introduced a “new indication threshold” for instant channel deposits for retail and small businesses.
“These changes will maintain the UK’s openness to international banking, while filling the gaps we have identified in the regime and raising some thresholds to support competitiveness and growth,” said Sam Woods, CEO of PRA.
