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Icesave- Martin is wrong.
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In response to the person who said it took them a month to make contact with Icesave - I rang them at 4.40 this afternoon, got through in a matter of minutes, spoke to a very nice person for about 15 minutes, who answered all my questions. I have found the staff to be very helpful at all times and very accessible.0
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A question on the compensation scheme.
Is it true that if Landesbank went belly up and the Iceland govt scheme could not afford to compensate then the UK scheme would cover full compensation?
If you read around you get varying answers.
No one knows. A bank has never really gone belly up and the authorites forced to pay up.
However they have in place a scheme where a pot of money is saved to pay back. Icelands economy is strong with very little debt.
Landisbanki are believed to be around 70% liquidity with loans only in Iceland and nordic states (as i understand).
They are covered by the passport scheme so your first £15,000 is required to be collected from Iceland the remaining £20,000 for the financial authorites.
I hope this summaries accurately (i wait for a toasting) and is simple to understand.8,000 / 10,000 saved. Another 2,000 by April 2011!0 -
As I said, the ultimate demise was a result of savers losing confidence.
No. Savers losing confidence was the effect. Another effect was the credit markets losing confidence. The cause was inability to meet margin calls. IF NR had been able to meet it's margin calls unaided, then regardless of the queues outside the bank would have been safe.
All they would have had to do was close the doors.
Bear Stearns had no depositors, and as it was an investment bank there was no run -but again the cause of their demise was the credit markets callin in their debts, and refusing to make any more, and bear being unable to pay it's debts.
There has never been a loss of public conficence in HBOS, yet they were subject to a 30% loss in share price, being heavily shorted, required emergency funding, and the FSA, and the goverment had to come down very heavily to stop a collapase. Because they were apparently struggling to make their margin calls.
The more a bank is reliant for it's operations on wholesale funding, and the more that funding is based on collaterised asset securities, and the more those assets are uk or us mortgage based, and the more the market in those assets contracts : the more at risk it is.
This is why the fed and the BoE are accepting these assets, which are rapidly shrinking in value as collateral against central bank loans. Using OUR money to prop up banks that are standing on the quicksand that are the UK buy to let, high LTV, and US sub prime, and alt/a derivative markets.
NB i only put the cartoon up to counter the picture of comical ally.0 -
If you read around you get varying answers.
No one knows. A bank has never really gone belly up and the authorites forced to pay up.
However they have in place a scheme where a pot of money is saved to pay back. Icelands economy is strong with very little debt.
Landisbanki are believed to be around 70% liquidity with loans only in Iceland and nordic states (as i understand).
They are covered by the passport scheme so your first £15,000 is required to be collected from Iceland the remaining £20,000 for the financial authorites.
I hope this summaries accurately (i wait for a toasting) and is simple to understand.
Pretty good summary i'd say.0 -
....that the statement from the Financial Services Compensation Scheme about possible complications was just their opinion and not worth more than anyone else's.
Yes the FSCS, run by the FSA, an orgnisation globally renound for it's competence, and surefootedness in all matters financial....
" The catalogue of errors included an extraordinarily high turnover of FSA staff directly supervising the bank, inadequate numbers of staff and, partly as a result, very limited direct contact with Rock executives.
The report also found incomplete paperwork and only limited understanding in the supervisory team of the duties contained in the regulator’s “close and continuous” supervision model.
“If the FSA was being regulated by the FSA...it would have failed on all points,” said Simon Morris, financial services partner at law firm CMS Cameron McKen....."
The worst part of it is that most of this comes from the FSA's own report!!!
FT - March 26th0 -
If you read around you get varying answers.
No one knows. A bank has never really gone belly up and the authorites forced to pay up.
However they have in place a scheme where a pot of money is saved to pay back. Icelands economy is strong with very little debt.
Landisbanki are believed to be around 70% liquidity with loans only in Iceland and nordic states (as i understand).
They are covered by the passport scheme so your first £15,000 is required to be collected from Iceland the remaining £20,000 for the financial authorites.
I hope this summaries accurately (i wait for a toasting) and is simple to understand.
I asked because I received the following paragraph within an email from the Motley Fool that appeared categoric.
[FONT=verdana,arial,helvetica,sans-serif]The Financial Compensation Net[/FONT][FONT=verdana,arial,helvetica,sans-serif]If you are worried about safety, the Financial Services Compensation Scheme (FSCS) is designed to safeguard your money. If your bank were to go bust, the first £35,000 of your savings per UK financial institution would be protected in full.[/FONT][FONT=verdana,arial,helvetica,sans-serif]In respect to Icelandic accounts, Kaupthing Edge deposits are currently held by UK company Kaupthing Singer and Friedlander Ltd, and qualify for the maximum protection of £35,000 under the scheme. This is the same for FBN and ICICI bank.[/FONT][FONT=verdana,arial,helvetica,sans-serif]Money held in the Icesave savings (currently paying 6.05% on balances from £1) falls under slightly different rules, as the account is initially covered under the Icelandic Deposit Guarantees and Investor-Compensation scheme. This means that the first €20,887 (currently £16,398) is protected in full by Iceland's regulator.[/FONT][FONT=verdana,arial,helvetica,sans-serif]However, savers also have a further guarantee under the FSCS, which offers 100% of the first £35,000, minus any payments made under the Icelandic scheme. [/FONT][FONT=verdana,arial,helvetica,sans-serif]Either way, these accounts have exactly the same protection as UK deposits.[/FONT][FONT=verdana,arial,helvetica,sans-serif]Take advantage of the fact that because of the credit crunch, banks are eager to get their mitts on your cash at the moment. And as long as you stay under the £35,000 compensation limit, your savings will be fully protected.[/FONT][FONT=verdana,arial,helvetica,sans-serif]And finally, don't be put off by the gloomy headlines about the credit crunch. After all, your money won't earn any interest if it's hidden under your mattress.[/FONT]'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
I read that as saying that the FSCS will top-up whatever the Icelandic scheme pays to £35k, so if the Icelandic scheme pays zero, you'll get the full £35k from the FSCS, if Iceland pays £5k, you get £30k from the FSCS and so on.0
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I think we are in danger of going round in circles with the FCSC compensation, and passport schemes, and offset schemes.
Regardless of what the FCSC may state (in tablets of blood according to some people) it's easy (for them and us) to be wise before the event, and say
'This is how compenstaion is going to work'
The reality is that a bank failure of any size will be a very complicated and fruaght affair, and nothing that the FCSC has said up to that point can ever be held against them. Especially if other countries schemes are involved, or the colapse sets off a domino effect.
We the investors, have no contract with the FCSC, and have no recourse.
Within the broad principle that the limit is £35k - the FCSC customers ie the remaining banks, and it's owner, the BoE/tresury will set the rules, for timescales and payments - appropriate to the situation.
REGARDLESS OF WHAT THE FCSC SAY NOW
So in broad terms, if you have less than net £35k with any banking group that is in the scheme, you are covered, if you have more or bank outside the scheme you are not.
This argument is like trying to second guess exactly what will happen during an insurance claim, should your house burn down.
Me : So if my house burns down, Am i covered for re-building, and alll that.
Insurance company : Yes
Me : How long will it take to rebuild the house then?
IC: depends on how much damage is caused, and the circumstances of the fire.
Me: Yeah but will it take a month, six months, or a year?
IC: We can't really answer that question.
Me Yeah but in my policy says that my claim will be handled quickly and smoothly
IC: It will.
Me: So how long is quickly then?
IC: We can't really answer that question.
Me: OK but I'm worried
IC: That's understandable.
Me: You're not being very specific.
IC: 'Silence'
Me: So you can't give me any more details
IC: All we can tell you is that your claim will be handled quickly and smoothly, and you are covered in the event of a fire.
Me: Yeah but how long will it take to rebuild my house?
IC: Depends on how much damage is caused, and the circumstances of the fire.
Yeah but will it take a month, six months, or a year?
IC: We can't really answer that question.
Me Yeah but in my policy says that my claim will be handled quickly and smoothly
IC: It will.
Me: So how long is quickly then?
IC: We can't really answer that question.
Me: OK but I'm worried
IC: That's understandable.
Me: You're not being very specific.
IC: I'm sorry we seem to be going round in circles, I'm sorry i haven't been able to help on this occasion. Goodbye... Click Burrrrr0 -
No, the FSCS would only cover any amount between ~15K and £35K. If you had less than ~£15K in that situation you would receive nothing.A question on the compensation scheme.
Is it true that if Landesbank went belly up and the Iceland govt scheme could not afford to compensate then the UK scheme would cover full compensation?0 -
How do you know that? My reading of the various explanations always seems to have phrases like "You are covered up to £35k by the FSCS (less any amount paid by the home country compensation scheme)", implying that they'll pay out whatever the home country of that bank doesn't, rather than what they might have paid out if they hadn't gone bust.No, the FSCS would only cover any amount between ~15K and £35K. If you had less than ~£15K in that situation you would receive nothing.I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0
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