The Financial Services Authority (FSA) has increased the compensation limit for bank deposits from £35,000 up to a total of £50,000 for each customer’s claim.
This increase applies from midnight Monday 6th October 2008.
Customers with joint accounts will be eligible to claim up to £100,000.
Whether this will be enough to stop funds flowing overseas remains to be seen.
Both Ireland and Greece have unilaterally declared to protect all depositers funds.
This move has caused great uncertainty within EU markets and at the weekend German Chanceller Angela Merck suggestede that German banks may take the same action.
We await further moves from Gordon Brown and Mr A Darling.
The situation could be worsened further this week as the Bank of England are erxpected to cut Interest Rates by up to 1% to deal with the ongoing banking and insurance credit crunch crisis.