A prediction

Reaper

I'm always ready to have a fact based discussion but I've grown rather weary lately of some of the doom laden panicking headless chickens who aren't taking a balanced view.

Taking Icesave as an example, because I have savings with them and believe they are in no danger, I find it bizarre that people are taking sub-£50k savings out to put it in UK or Irish banks because they think it is safer and want to avoid going through any compensation shemes.

So I thought I'd put my neck out and make predictions - which no sane person would do in the current crisis. That way you can dig it out and make fun of me later - but only if you make predictions of your own. So here goes, let's see how I score out of 5:

1)[strike] Icesave won't go bust or need to be taken over[/strike] Wrong!
2) [strike] Another British bank will go down and this time the government won't save it[/strike] Wrong!
3) [strike] That bank will be Royal Bank of Scotland[/strike] Wrong! Though they did have a wobble.
4) The government will compensate savers 100%, even those with more than £50k Right!
5) An Irish bank will also fail within the next 3 months. Savers will get 100% of their money back.

So if I'm right taking money out of Icesave and giving it to UK/Irish banks would be a poor move.

iltisman

I think item 4 on your list is a bit unrealistic where would all that cash come from.
I wonder what will happen to tax rates in the next budget with all the money that has been chucked at the problem so far.

napoleon

iltisman wrote: »

I think item 4 on your list is a bit unrealistic where would all that cash come from.
I wonder what will happen to tax rates in the next budget with all the money that has been chucked at the problem so far.

You misunderstand, just because a bank goes down doesn't mean that all savings deposits have disappeared into thin air

Stavros_3

Reaper wrote: »

1) Icesave won't go bust or need to be taken over
2) Another British bank will go down and this time the government won't save it
3) That bank will be Royal Bank of Scotland
4) The government will compensate savers 100%, even those with more than £50k
5) An Irish bank will also fail within the next 3 months. Savers will get 100% of their money back.

Doesn't number 2 and number 4 contradict each other, or are you taking an each way bet? :rotfl:

Tony_Webster

Given that the Prime Minister & Chancellor are Scottish, and represent Scottish constituencies, the chances of them allowing a bank with the word 'Scotland' in its name to fail seem pretty slim.

Lokolo

Stavros wrote: »

Doesn't number 2 and number 4 contradict each other, or are you taking an each way bet? :rotfl:

I think you are getting confused. OP meant that the bank wouldn't be nationalised and would fail, therefore the FCS would come into effect but they would change it to be 100% rather than £50k.

Reaper

Stavros wrote: »

Doesn't number 2 and number 4 contradict each other, or are you taking an each way bet? :rotfl:

No. The bank will be allowed to fail because it is bigger in size than Britain's entire GDP so they won't be able to afford it. I also think they may struggle to find a buyer.

Compensating the savers is a smaller proposition. The amount of savings in a bank is dwarfed by the loans business. That's been the problem.

globalds

Any predictions for defaults on payments by governments ?

Stavros_3

Lokolo wrote: »

I think you are getting confused. OP meant that the bank wouldn't be nationalised and would fail, therefore the FCS would come into effect but they would change it to be 100% rather than £50k.

I apologise, it must be my eyesight, I thought number 4 mentions the Government and not the FSCS
4) The government will compensate savers 100%, even those with more than £50k

Lokolo

Stavros wrote: »

I apologise, it must be my eyesight, I thought number 4 mentions the Government and not the FSCS
4) The government will compensate savers 100%, even those with more than £50k

Yes stop being Mr. Pedantic. You knew what the OP meant.

Stavros_3