2008/09 interest levy for the bank failures

29th July 2009

Firms in the deposit class will be levied �406m later this week for initial interest charges and related management expenses in respect of the bank failures in 2008/09. The costs will not affect any other class or sub-class.

The total levy firms will pay now is the same as announced by the FSCS in March. The FSCS and FSA are writing to the deposit taking sector about the costs and are sending invoices to individual firms.

The loans are interest only for the first three years. The FSCS and HM Treasury will agree a repayment schedule for unpaid principal (net of recoveries) after three years in the light of prevailing market conditions.