A serial chair of government-sponsored agencies is to become the new head of Britain’s bank compensation scheme as the Bank of England prepares to widen its scope after last year’s string of industry crises.

Sky News has learnt that Lesley Cowley, who chaired the Driver and Vehicle Licensing Agency (DVLA) for nearly a decade, is the frontrunner to take the same post at the Financial Services Compensation Scheme (FSCS).

City sources said that her appointment could be announced within days.

If confirmed, Mrs Cowley would replace Marshall Bailey, who has served two three-year terms at the helm of the FSCS.

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The statutory compensation scheme, which is funded by a levy on the industry, exists to protect customers of failed banks and insurers, among other regulated financial services.

It operates with a cap of £85,000 per customer for each bank account they hold with a different regulated lender.

Last year, it emerged that the Bank of England was seeking to augment reforms to the FSCS, including measures to better protect depositors at smaller banks.

The trigger for the review came when Silicon Valley Bank collapsed in the US early in 2023, leaving clients of its UK arm nervous that they would lose their deposits.

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Such an outcome was ultimately averted by HSBC’s emergency rescue of the British division.

Mrs Cowley also chairs Companies House, which is responsible for incorporating and dissolving limited companies in the UK, and Airport Coordination, which manages airport slots at 46 airports across the country.

The Financial Conduct Authority and Prudential Regulation Authority – respectively the City and banking watchdogs – play a leading role in the FSCS recruitment process.

The Treasury declined to comment on Thursday.

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