(Adds more detail)
LONDON Nov 21 The Bank of England has proposed
raising "insurance" on bank account deposits back to 85,000
pounds ($105,000) from Jan. 30, 2017, to reflect the sharp fall
in sterling following Britain's decision to leave the European
The level of deposit account protection is set under EU
rules at 100,000 euros or its equivalent in member states that
do not use the single currency.
It was cut to 75,000 pounds in 2015 following a regular
five-year adjustment under the bloc's rules. A weaker euro
against the pound was the reason for the cut.
The BoE's Prudential Regulation Authority, which regulates
banks in Britain, said a change in the pound's value against the
euro after Britain voted in June to leave the EU, means it can
Sterling lost about a fifth of its value against the euro in
the aftermath of the June referendum, and the EU rules allow for
adjustments due to unforeseen events.
"Restoring the limit to 85,000 pounds - the level in effect
for almost five years prior to 3 July 2015 - is intended to
provide a measure of memorability and consistency," the PRA said
in a statement.
Lenders would have until the end of June 2017 to implement
the necessary changes to systems.
"The PRA will continue to monitor fluctuations in the
exchange rate but, barring unforeseen events, will seek to avoid
making further adjustments to the deposit protection limit," the
Andrew Tyrie, chairman of parliament's Treasury Select
Committee, described the cut in 2015 as absurd.
($1 = 0.8108 pounds)
(Reporting by Huw Jones, editing by Carolyn Cohn and Louise