PRA to Extend Temporary High Balance Coverage Amid COVID Crisis
PRA published the policy statement PS19/20 on the final policy for extending coverage under the Financial Services Compensation Scheme (FSCS) for Temporary High Balance. PS19/20 amends the Depositor Protection Part of the PRA Rulebook (Appendix 1) and the Statement of Policy on the Deposit Guarantee Scheme (Appendix 2). PS19/20 also contains feedback to responses to the consultation paper CP6/20 on extending Temporary High Balance coverage. In CP6/20, PRA had proposed to increase the Temporary High Balance coverage period from six months to twelve months up until, and including, January 31, 2021. PRA highlights that responses to CP6/20 did not raise issues that would lead to any changes to the proposal. Coverage for Temporary High Balance will revert to six months, from February 01, 2021. The rule change and updated Statement of Policy will become effective on August 06, 2020.
The Temporary High Balance rules of PRA extend FSCS coverage from GBP 85,000 to GBP 1 million for a period of six months from the point of deposit for certain qualifying life events, including deposits in preparation for the purchase and proceeds from the sale of residential properties, benefits payable on death, and life assurance payouts. The length of coverage for each Temporary High Balance would be determined by reference to the date on which a Temporary High Balance is credited to a depositor’s account, or the first date on which the Temporary High Balance becomes legally transferable to the depositor, whichever is later. The proposals were aimed to mitigate the consumer protection issues caused by the impact of COVID-19 on residential property and investment markets and on access to banking services, for some depositors.
PS19/20 is relevant to retail financial consumers that are, or may become, Temporary High Balance depositors. PS19/20 is also relevant to FSCS and to all authorized deposit takers. PS19/20 has been designed in the context of withdrawal of UK from EU and entry into the transition period, during which time UK remains subject to European law. PRA will keep the policy under review to assess whether any changes would be required due to changes in the UK regulatory framework at the end of the transition period, including those arising once any new arrangements with EU take effect. PRA has assessed that the policy would not need to be amended under the EU (Withdrawal) Act 2018.
Related Links
Effective Date: August 06, 2020
Keywords: Europe, EU, Banking, COVID-19, FSCS, PRA Rulebook, Deposit Guarantee Scheme, Residential Property, Credit Risk, CP6/20, PS19/20, Temporary High Balance Coverage, PRA
Featured Experts

Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous Article
FSI Studies Involvement of Central Banks in Financial OversightRelated Articles
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.
FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates
The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.
FSB Reports Assess NBFI Sector and Progress on LIBOR Transition
The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.