How Safe is Your Money in an ISA or Brokerage Account?

Would a bank 'bail-in' mean you stand to lose money?

Chris Menon 3 May, 2013 | 7:00AM
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News that some savers in Cyprus have lost large amounts of money that they thought was safe in bank accounts unsurprisingly caused investors in the UK to wonder how safe their investments are. So how safe is your money in ISAs and brokerage accounts?

Systemic Collapse

Concern has been heightened because, in the unlikely event of a systemic collapse of the banking system, the Bank of England has proposed that there should be a ‘bail-in’ of shareholders and unsecured creditors.

This was made explicit in a document “Resolving Globally Active, Systemically Important Financial Institutions” published jointly by the US Federal Deposit Insurance Corporation and the Bank of England back in December 2012. It concluded:

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About Author

Chris Menon  is a financial journalist writing for Morningstar.co.uk.