The Charities Aid Foundation (CAF) has strongly urged that charitable organisations should be classified as a separate depositor class which would automatically be eligible for compensation, thereby protecting charitable funds against losses such as those incurred by the collapse of the Icelandic banks last October.
CAF has made the recommendation as part of its formal response to the Financial Services Authority’s Consultation on the Financial Services Compensation Scheme (FSCS)
In February this year CAF set out its case that charities and their services should not be placed in jeopardy because of the failure of the banking system when it gave evidence to the Treasury Select Committee.
Commenting on the consultation paper John Low, Chief Executive of CAF said: “The proposed reforms do not go far enough and charities should automatically be eligible for compensation. The immense social cost resulting from the withdrawal of charitable services is not an acceptable price of bank failure.”
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