Kaupthing Edge - should I move my money?

mobfant

One thing I've been thinking. Even though there are lots of Brits withdrawing money from Icelandic banks, I'm guessing that Icelanders don't have any other option, so the British withdrawal isn't enough to precipitate a collapse. Although of course there are many other factors at play.

isofa

Andrew64 wrote: »

I don't think it would have been politically possible for the Icelandic government to be seen giving a 100% guarantee to us foreigners.

That's true, pity the UK government can't act quickly and with clarity.

IMO Iceland cannot allow their banks to fail, so therefore, the risk to UK savers is minimal anyway.

emc

napoleon wrote: »

If one of the lemmings can tell me of a case of a saver who has lost money so far I'd agree with you. Until then, they're simple lemmings and nothing else.

The OP wasn't asking whether savers would lose their money in Icelandic banks, but wanted to avoid the problems of claiming on the FSCS, so would be well advised, assuming as I said before there is no penalty, to move the savings to somewhere like Northern Rock or the guaranteed Irish banks, for several reasons.

Icelandic banks like Landsbanki (IceSave) have a separate Icelandic scheme guaranteeing the first €20,887 of any savings, and the FSCS covers any amount above that, up to £50,000, and so any claims on these would be more complicated.

The Icelandic economy and their currency are on the slide, with the Icelandic prime minister saying "We were faced with the real possibility that the national economy would be sucked into the global banking swell and end in national bankruptcy."

The Icelandic government had to take over the third largest bank a la Northern Rock, but things are getting worse.

Trading in six of Iceland's biggest banks and financial firms was temporarily halted. Banks dominate Iceland's economy, leaving the island of just 300,000 people heavily exposed to the global credit squeeze.

Iceland's largest banks have agreed to sell off some of their foreign assets and bring them home, in an effort to shore up the economy and prevent the currency, the krona, from sliding any further. Last week, it lost a fifth of its value against the dollar and on Monday it plunged 30% against the euro.

[Taken from BBC hxxp://news.bbc.co.uk/1/hi/business/7655227.stm Monday, 6 October 2008 19:42]

moanymoany

thumshie wrote: »

Thats riled me...:mad:

So Iceland obviously wants to treat us foreigners as second class depositors, not good enough for their protection, while our money is good enough to keep their financial system from melting..

Until now I was happy to keep my money with them(both Icesave and K.E), however now I'm seriously reconsidering that..........

Iceland only have 320,000 inhabitants - how much can their Government be expected to do?

When looking for somewhere safe to put your dosh - NS&I guarantee 100% of your savings. Poor interest - but absolutely safe.

napoleon

hide it under your bed if you're that worried

bikeman

As I said before a guarantee is worth nothing if the guarantor hasn't got access to sterling. Ireland, Iceland etc have not got the ability to raise unlimited ammounts of sterling in the same way as the UK government does (ie it can print more).

The only option available to Ireland, Iceland is to 'buy' sterling at current market rates.

If the country is in trouble (as Iceland is now) they will not have enough money to purchase sterling to meet their guarantees.

The guarantees they have made are likely worthless since by doing so both countries caused savers to rush to them and thereby pushed their liability beyond that which either country could afford.

As you can see in the case of Iceland, when the sh*t hit the fan, they were quick to freeze foreign investors funds and look after their own nationals.

Only a fool would rely upon ill thought out guarantees made by foreign organisations.