Mergers must carry warning labels

  • Story by: Hal Austin
  • Magazine: FinancialAdviser
  • Published Thursday , October 02, 2008

Investor compensation issues need addressing

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The recent mega-mergers and state rescuing of distressed banks and mortgage lenders raises the thorny issue of investor compensation.

Give the £35,000 limit protected under the Financial Services Compensation Scheme, a prudent saver or investor placing money in HBoS, Lloyds TSB, Abbey, Alliance & Leicester and Bradford & Bingley could find himself now protected in two mega-schemes.

It is important that every merger should bring a fresh round of public warnings that the investments are only protected to a limit, according to the system of regulation under which the various institutions trade.

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