Iceland

ianmr65

casper_uk wrote: »

Yes but surely a good solid bank should have enough funds available to pay back all depositers? Any bank that can't pay out is surely using a bad business model that only works when times are good?

No bank in the world could pay out all it's deposits in one go. The principle of banking is that people lend the banks money, eg depositors, and the banks lend it on again, eg mortgage holders.

Mr_Mumble

ianmr65 wrote:

the CDS market is an unregulated, and un-monitored basket case.

You talk as if unregulated and unmonitored is a bad thing! Here's those fearmongering tabloid hacks at the FT referencing CDSs and Iceland:

The cost to insure Iceland against default rose 23bp to 390bp, 130bp higher than at the start of the month. The other two main Icelandic banks saw their CDS rise too. The CDS of Landsbanki rose to 1,150bp, up from 480bp at the start of the month, while the cost to insure Kaupthing against default rose to 1,345bp, up from 750bp at the start of the month.

http://ftalphaville.ft.com/blog/2008/09/29/16434/cds-report-iceland-in-the-spotlight/

By comparison:

The cose to insure the senior debt of HBOS rose to 350 basis points from around 300bps at the end of last week, meaning it now costs €350,000 to insure €10m of debt against default. The quoted spread for CDS on Lloyds TSB is around 209bp, up from around 185bp last Friday.

http://ftalphaville.ft.com/blog/2008/09/30/16507/cds-report-lloyds-tsb-and-hbos-under-pressure/

ianmr65 wrote:

Last time I looked Morgan Stanley don't exist any more... And Kaupthing are going strong.

I hope you didn't have shares to throw away, Morgan Stanley rose 10% yesterday and has a market cap of $25.51bn, Mitsubishi UFJ bought 20% of the firm last month.

ianmr65

Mr_Mumble wrote: »

You talk as if unregulated and unmonitored is a bad thing! Here's those fearmongering tabloid hacks at the FT referencing CDSs and Iceland:


http://ftalphaville.ft.com/blog/2008/09/29/16434/cds-report-iceland-in-the-spotlight/

These are bloggers not hacks, and no-one is buying CDS notes to ensure debt - a 350 point spread implies 3.5% on the cost of the loan?
Not in this universe!! This is part of the reason the credit markets are frozen. No one can afford to ensure the debt, in the crazy world of CDS trading.

The fact that CDS counterparties, don't actually have to be the institutions who are lending, or borrowing- and frequently are not - should tell you something about that market.

Standard CDS spreads for banks a couple of years back, were about 30. or 0.3% on the loan cost

edwinac_2

ianmr65 wrote: »

Iceland does have a major export. Energy. They are throwing up geothermal powerstations, at breakneck speed, and will become a major player in the energy stakes.

"Iceland.. a major player in the energy stakes" ?! !!!!!!??!

'Energy Balance' statistics from the International Energy Agency show Iceland is a net importer of energy (mainly petroleum products and coking coal). They can't even keep themselves warm, never mind selling us their hot air!

You sound like David de Rothschild. Geothermal power is one of his madcap ideas! That's when he isn't rambling about carbon offset trading on BBC Newsround.

Essentially, there is no physical economy to Iceland. Wool sweaters (and Magnus Magnusson) really are its only export!

Mr_Mumble

edwinac wrote:

The FSCS just admitted they have no cash to give out! In the case of the B&B, the Government had to lend the FSCS the money to give to the depositors. That's okay until next time, but what then?

They can just print it if needbe.

edwinac wrote:

What you might want to point out is that the Icelandic banks, being outside the Eurozone, cannot suck from the ECB's titty bottle.

A problem for immediate liquidity but hardly a barrier in the horse-trading that would go on if Iceland were a few hours from bankruptcy and talking to EU leaders about a bailout

ianmr65 wrote: »

These are bloggers not hacks

Irrelevant, they contribute to the print edition but if you really must have a portion from the dead tree format:

Credit default swaps saw Iceland come under pressure as Glitnir, one of its leading banks, was nationalised. The country's CDS, a kind of insurance against bonds defaulting, rose 23bp, or €2,300 for every €10m of debt, to 390bp. The spread is 130bp higher than at the start of the month.The cost to insure Glitnir against default now stands at a record level of 1,450bp, almost double its level of 850bp on September 1.
The CDS of Fortis, which was rescued by the governments of Belgium, the Netherlands and Luxembourg, rose to 640bp, from 116bp at the start of the month. Bradford & Bingley rose to 1,681bp, up from 424bp at the start of the month

http://www.ft.com/cms/s/0/b9e30b90-8e86-11dd-9b46-0000779fd18c.html

The CDS market is constantly referenced and watched by city professionals, I make no apologies for quoting it and nor should hacks whoever they write for.

edwinac_2

Mr_Mumble wrote: »

Originally Posted by ianmr65

Last time I looked Morgan Stanley don't exist any more... And Kaupthing are going strong.

I hope you didn't have shares to throw away, Morgan Stanley rose 10% yesterday and has a market cap of $25.51bn..

You've got to wonder which Company is handling "ianmr65"..

This forum literally oozes propagandists.

blizeH

I've got just over £35k in Icesave; I'll prune it to almost exactly £35k but that's as far as I'll go.

Yes all of this is a little worrying, but Icesave have been f**king awesome to me, so I have no intention of cashing everything out.

They're likely only to get in trouble if people start panicking and withdrawing their money based on a few rumours and the misguided belief that UK banks will be more safe than Icelandic ones.

SouthCoast

Why does this Board have so many posts about Icelandic Banks, a country with a population similar to that of Brighton & Hove?

Where are the posts about banks based in the major EU trading countries?

isofa

SouthCoast wrote: »

Why does this Board have so many posts about Icelandic Banks, a country with a population similar to that of Brighton & Hove?

Where are the posts about banks based in the major EU trading countries?

Because many people in the UK have deposited money with several of the Icelandic banks due to excellent service and rates. Unfortunately some are getting in a flap now!

luvpump

SouthCoast wrote: »

Why does this Board have so many posts about Icelandic Banks, a country with a population similar to that of Brighton & Hove?

Where are the posts about banks based in the major EU trading countries?

That is one of the reasons so many posts have been started, a small population & at least 2 big banks, now the 3rd has been bailed out this week!.. Could a country that small cope if the other two went under ?? Perhaps the Savings would be bought up by another Bank for its liquidity, If it wasn't bought in the event of collapse,how long would the Passport Scheme take to pay out ??, there are so many unknowns that IMO its best to get out ,for the sake of an extra 0.5% ,Look how much the Icelandic Krona has sunk in the last year !!
I have 10k with icesave I cant touch, but have pulled out of Landisbank for the time being,I dont think there will be a problem & think Kaupthing are a very professional Bank,Great Customer service,but no one really knows for sure what will happen, but simply for peace of mind i have Jumped ship, i hope to return one day..