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Major firm withdraws millions from bank

Major firm withdraws millions from bank

Prominent British law firm, Eversheds, is moving millions of pounds into more stable financial institutions to avoid risk in the event of further bank failures.

Prominent British law firm, Eversheds, is moving millions of pounds into more stable financial institutions to avoid risk in the event of further banks failures.  


The firm has moved at least 18 million pound (AUD$36m) of firm and client money since the global financial crisis began in September last year, reports Legal Week


The money has gone from approximately 20 financial institutions, including Investec, and moved into six UK clearing banks, including Barclays, HSBC, Lloyds and Royal Bank of Scotland.


The move has unsurprisingly strained relationships with some of their previous banking partners, who in retaliation have dropped the amount of work they send Eversheds way, in frustration at seeing the deposits withdrawn.


Eversheds chief executive, Bryan Hughes, said: "As a business we made a decision following the banking issues of last year to move the firm's and client funds into the main U.K. clearing banks where funds are guaranteed by the U.K. government. Our priority had to be to protect our client's money. It was a no-brainer for us."


He added: "We all hope the position becomes more stable and then we will have cause to consider our position again."


Other firms are also understood to be making a similar move as a result of the financial crisis that has claimed names such as Northern Rock and seen others, such as RBS, being bailed out by the British Government.


The lack of confidence in the banking system has also seen some firms moving their deposits across a wider range of institutions, with one London firm confirming that it now spreads its money across three banks rather than holding it with a single institution.


Last October the Law Society issued guidance for law firms concerned about client accounts, warning firms to insure against a bank's collapse by moving client money to more secure banks and use multiple accounts to further reduce risk.


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