Kaupthing Edge, Should I Avoid?

KingL

I don't think anybody is suggesting that there would be less protection than under the UK FSCS.

If Kaupting SFL elected to novate customers to Kaupthing Bank hf, you would have to claim the first part from the Icelandic system and the remainder from the UK system in the event of a meltdown. This might be slower or involve more hassle than the current purely FSCS based situation.

Vectra

...Mohammed Bin Khalifa Al-Thani has become Kaupthing's third-largest shareholder by buying 37.1m Kaupthing shares in the open market for $285m following... ...

Jonbvn

bgeeees wrote: »

This is the sort of thing that gets Robert Peston all excited.

Remember that dull & boring doesn't sell.

Peston as the proverbial Nero is only singing the tunes he likes.....

edwinac_2

bgeeees wrote: »

My money is staying put.

"Nothing is easier than self-deceit.
For what each man wishes to be true he believes to be true."
-- Demosthenes (~350 B.C.)

alared

I noticed when I logged-in today that I had to agree to their new T&C`s updated from 4th June.
It`s a 21 page document.
DAK if there are any other changes in them that could affect matters now?

This paragraph caught my eye.

3.2 Novation
[FONT=Arial,Arial][FONT=Arial,Arial]Kaupthing Singer & Friedlander Limited may, by notice to you, novate the contract between it and you [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial](comprising the Terms and Conditions) to Kaupthing Bank hf. This means that from the date of the notice to [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]you, all of Kaupthing Singer & Friedlander Limited’s rights and obligations to you will be transferred to Kaupthing [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]Bank hf, with whom you will have a contract comprising the Terms and Conditions. From that date, your rights [/FONT][/FONT][FONT=Arial,Arial]
[FONT=Arial,Arial]and obligations under the Terms and Conditions will be with Kaupthing Bank hf. Kaupthing Singer & Friedlander [/FONT]
[FONT=Arial,Arial]Limited will notify you of that novation through one of the Communication Methods. You consent to that [/FONT]

[FONT=Arial,Arial]novation. [/FONT]



The way that reads to me is that they can just send you an email saying you`ve been novated and because you`ve already agreed by signing their latest T&C`s you`re tranferred to come under Iceland compensation scheme.
So you go to bed one night fully protected by the FSCS £50k guarantee,you get an email during the night and you wake up under the Icelandic system.

Time for a move me thinks!
[/FONT]

KingL

That's how I read it too. In the interests of balance, it's worth pointing out that in their faq (#13, reproduced below) says that they would give 30 days notice in the event of it actually happening. It's also worth saying that, the icelandic system gives you exactly the same amount of protection as FSCS (as it is topped up by the FSCS). I expect it would be more hassle and delay to implement, mind. (Note that the £50k protection doesn't apply until Tuesday).

---

Question: I see in the terms and conditions that my deposit might in the future be with Kaupthing Bank, not Kaupthing Singer & Friedlander Ltd. What would this mean for me?

Answer:
We have no intention of moving your deposit to Kaupthing Bank, and though in the unlikely event that we were to do so, we would give you at least 30 days notification.

If this did happen you would remain a Kaupthing Edge customer and your account number, details and call centre contacts would not change. Your money would remain safe, and protected up to exactly the same amount as the UK Financial Services Compensation Scheme (which currently pays up to £35,000). The only material difference to you, would be the structure of the compensation itself, which would be provided by two schemes (sometimes referred to as a passport scheme):

• The first level of protection is provided under the Icelandic Depositors’ and Investors’ Guarantee Fund. The maximum protection under this scheme is 100% of the first €20,887 (or the sterling equivalent) of your total deposits held with us.
• The second level of protection is provided by the UK Financial Services Compensation Scheme. This scheme "tops-up" your protection so that the protection under both schemes is equal to 100% of the first £35,000 of your total deposits held with us.
• Under EU law compensation for any losses incurred due to the failure of a bank should be paid within three months - regardless of whether it is through a passport scheme or the UK Financial Services Compensation Scheme.

• ---

krakow

I have to admit to being a little worried on hearing mention of Iceland and Kaupthing facing possible difficulties on Radio 4, but at the moment not enough so to move my money.

The HBOS 7% 6 month fixed rate is very tempting regardless of any problems elsewhere though.

agsnu

alared wrote: »

[FONT=Arial,Arial]The way that reads to me is that they can just send you an email saying you`ve been novated and because you`ve already agreed by signing their latest T&C`s you`re tranferred to come under Iceland compensation scheme.
So you go to bed one night fully protected by the FSCS £50k guarantee,you get an email during the night and you wake up under the Icelandic system.

Time for a move me thinks!
[/FONT]

No, you're being alarmist. Any theoretical deposits held by Kaupthing Bank hf will be topped up to the full level of protection afforded by the FSCS. The only difference is that you will have to claim the first €20,000 from the Icelandic protection scheme, and the remainder (£50k-€20k) from the FSCS.

Once again, you will have the same amount of overall protection no matter whether your deposits are held by Kaupthing Singer & Friedlander Ltd or Kaupthing Bank hf.

alared

Another cross post so I`ll have to reply here as well:


I`m not being alarmist at all,just stating facts.
It`s all if`s and but`s about what may happen and who`ll do what and when.
BUT until the system is tested no one really knows.

Playing safe and have just moved out of KE this morning.
(let`s hope nothing happens while the BACS is going through):eek:

Stompa

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/3136795/Iceland-lines-up-bank-rescue-deal.html

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4883097.ece