Inconsistencies in asset protection schemes may cause flights to safety Monday, October 06, 2008
With national Governments in Europe independently determining investor protection schemes on the fly, worries are rightly being raised about regulatory arbitrage causing flights to safety e.g. money being switched to Germany or Ireland, who are reportedly offering 100% protection, from countries like the UK with capped schemes.
Oddly, yet to come into the spotlight is the differential on protection that is offered between banks and other financial institutions that are holding investor wealth such as Stockbrokers, Insurers and Independent Financial Advisers.
When the spotlight of the mainstream press turns on this, it may cause similar investor panic and force a widening of the guarantees being offered by Governments.