Savings with Bank of Cyprus UK will from midnight tonight fall under the full protection of British regulatory authorities.
Safer savings: UK savers with Bank of Cyprus are now protected by their home compensation scheme
This means the bank will participate, along with almost all other British financial institutions, in the London-based Financial Services Compensation Scheme. This promises to protect savers by up to £85,000 if a bank or building society goes bust.
Until today, Bank of Cyprus, which has operated in Britain for more than 50 years and has about 50,000 savers, has been protected under the equivalent Cypriot scheme.
This has offered slightly less compensation but, worryingly, if savers needed to claim they would depend ultimately on the solvency of the Cypriot banking system and government.
The economy is struggling in Cyprus and is closely linked to that of Greece. Fears have mounted in recent weeks that it, too, could be forced to leave the euro with disastrous consequences.
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Under full supervision of Britain’s Financial Services Authority, the bank’s operations here would be separated from the parent group, according to Bank of Cyprus’s UK spokesman Tony Leahy.
‘Like many banks in the UK, we will be owned by an overseas parent company but our operations here will be wholly ring-fenced,’ he says.Bank of Cyprus’s move leaves just two popular savings institutions – Triodos and ING – not covered by the FSCS.