Icesave: Can't get money out.

sadabbott

How quickly could Icesave go under? Are we talking days, weeks or months?

mybrainhurts

LucyTheDwarf wrote: »

Slight debasement? It's not like there's only 1 or 2 people who would be affected...

And, sorry, yes you did say Icesave. There's so many threads about the Icelandic banks at the moment, I'd forgotten which one I was posting on. Slap on the wrist for me not reading properly.

You are right, the sums are quite substantial. Assume 150000 Uk Icesave accounts (I think i heard that figure on radio 4 today) and assume virtually all have more than £15000 in them (ie more than about the eur 21000 underwritten by iceland) and the claim comes to £2.5bn. Pesto gives Iceland gdp as $20 bn = £11 bn. If Iceland runs out of money it runs out of everything except fish and hot water and will be living on food aid. How likely is it in those circumstances to ship out a quarter of gdp in hard currency to keep the English middle classes happy?

edwinac_2

sadabbott wrote: »

How quickly could Icesave go under? Are we talking days, weeks or months?

Keep your eyes peeled for a statement from the Icelandic government over the weekend, or early next week.

See the FT article today, Reykjavik seeks overseas loan...

Iceland was scrambling to help its banks secure access to foreign currency yesterday as investor nervousness drove the krona to new lows.

International confidence in the country's highly leveraged banking system plunged after the government nationalised Glitnir, the third-largest bank, on Monday after it ran into liquidity problems.

Rating agencies have downgraded Iceland and the three biggest banks. The cost of insuring the bonds of the top two, Kaupthing and Landsbanki, against default has soared to new records of 2,950 basis points and 3,625bp respectively.

The krona has fallen 13 per cent this week amid fears the state might have to bail out one of the other big banks. This would strain its finances, given that the combined assets of the three big banks is nine times Iceland's gross domestic product.

The government is expected to announce plans to boost its foreign exchange reserves and help banks frozen out of the international swap market.

Bjorgvin Sigurdsson, the commerce and banking minister, said that the government was considering seeking "a large loan" from abroad to shore up the krona.

Tryggvi Herbertsson, a special adviser to the prime minister, told the Financial Times that measures to "restart" the foreign exchange market would be drawn up over the weekend.

[..]

According to Iceland's central bank, the krona stood at IKr156.18 to the euro yesterday. However, offshore traders said it had dropped to IKr170, down more than 23 per cent on the week.

Hans Redeker at BNP Paribas said offshore trading in the krona, which is less liquid than the domestic market, was in meltdown.

"It is a collapsing market," he said. "People are just trying to get out of positions at any price."

casper_uk

nilrem wrote: »

It seems to me that their are people who write in this forum that are on a 'mission' to scare people into removing their savings from the Icelandic banks!
Otherwise why do they continually post anti Iceland stuff? I can understand the posters who are concerned about their savings (who would not be after reading the stuff posted here?) but why do some people keep coming here 'warning' people of the demise of Icesave?

It's probably because as soon as something is posted people moan about doom mongering and how there really isn't a problem and everything is going to be A OK. I think it's technical name is stickyourfingersinyourearsandsinglalalalalalalalala syndrome, so people post more and more and more etc.

chazza

i think you peeps should read this, gives a good insight into Icelands mess:

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/10/creditors_call_time_on_iceland.html

1+1=3

I've got well over £50k invested in Icesave, and I must admit I was a bit anxious when I started reading recent reports.

But I've just had a look at the Icesave website, and read an article on there about recent events. It states that their liquidity stands at 8 billion euros, they have no exposure to the US mortgage market, and there will be no significant impact to profit.

As I understand it, all Nordic banks have entered into an agreement (Denmark, Finland, Iceland, Norway and Sweden) to be jointly responsible for national financial stability in any one of those countries.

Can someone smarter than me please tell me why I'm wrong to keep my money with them.

Andrew64

Things look a bit grim in Iceland at the moment:

http://www.telegraph.co.uk/news/worldnews/europe/iceland/3135874/Icelandic-bank-with-British-savers-money-enters-crisis-talks.html

Personally, I think anyone with money in Kaupthing should be alright as you're covered by the FSCS. But anyone with Icesave (Landsbanki) is under the Icelandic scheme, and that should make you think.

jp01_2

Andrew64 wrote: »

Just remember that Landsbanki (Icesave) is covered by the 'passport scheme', so if it did go down the tube you would have to apply to the Icelandic compensation scheme first.

and you know how picks up the tab for that dont you?
The Icelandic govt.
The three Icelandic largest banks have liabilities eight times greater than the country's GDP.

Andrew64

jp01 wrote: »

The three Icelandic largest banks have liabilities eight times greater than the country's GDP.

So where does the money come from if the government doesn't have enough!?

Gerontius_2

Icesave, as part of Landsbanki, is well capitalised with 63% of its balance sheet held in deposits, better than some. It's also party to the European directive on deposit insurance and is bound, under European law, to provide reimbursement in full plus interest within three months. Wonder whether the UK will match this? It's clear that other Scandinavian countries who are better protected will swing in behind them - stop panicking!