City firms push for review of compensation scheme

LEADING city firms will petition the government for an accelerated review of the way the controversial financial services compensation scheme (FSCS) is funded.

The petition, launched by the British Insurance Brokers’ Association (BIBA) yesterday, will ask MPs to urge the Financial Services Authority (FSA) to speed up its review of the scheme.

The FSCS levy, used when financial services firms go bust, pays back investors who lose money.

Yet it is funded from a broad range of City firms, regardless of their involvement with the failed business.

The chairman of the all party parliamentary group on insurance and financial services Jonathan Evans MP will raise the issue in the house of commons when the petition is complete.

The FSCS set its levy for the coming financial year at £217m, reducing its interim estimate for the levy by £23m.