Ladies and gents - please calm down and stop adding to the hysteria

tonyhamm

At least thats what I got from the Icelandic PM's interview on the BBC news.
The PM made two points which I will 'translate' into common english...

(1) - You cannot get your savings. We are keeping them. *
(2) - There is no chance of the E20,000 scheme coughing up for UK savers.**
*(halted withdrawals)
**"Unlikely UK savers would lose out" - (but couldnt rule it out , then a dig at the UK government in follow up questions for not helping Iceland out with loans)

The compensation for the first E20,000 of savers deposits is not going to be coming from the tiny amount of Icelandic taxpayers.

So I whipped over to the FSCS site to find out how to get my savings now that Iceland has kept them. When you read the scheme its a long drawn out and torutoius process, which they might help you out - by providing you with phone numbers for the failed bank!

You find there is no obligation on the FSCS to pay for your savings even if the EEA E20,000 compensation scheme has failed!

http://www.fscs.org.uk/consumer/

Can anyone enlighten me more - should the UK government not make a statement on whats going to happen to our savings now that the PM of Iceland as effectively done the same!

altocumulus

The Icelandic scheme is legally obliged to honour the compensation - tonyhamm can you enlighten us on your source?

leviathan

tonyhamm wrote: »

You find there is no obligation on the FSCS to pay for your savings even if the EEA E20,000 compensation scheme has failed!

http://www.fscs.org.uk/consumer/

Can anyone enlighten me more - should the UK government not make a statement on whats going to happen to our savings now that the PM of Iceland as effectively done the same!

Indeed:

In the event of a failure of one of these banks, there would be a two step process as the home state scheme would have lead responsibility for claims, and would be responsible for paying the first part of any compensation. FSCS is only responsible for paying compensation for the topped up element to £50,000 on deposits with the UK branch. FSCS would, wherever possible, try to assist claimants in their dealings with the home state scheme (for example, by putting them in contact with the home state scheme, or helping them understand the process that the home state scheme will follow). FSCS would then deal with any 'top up' claims.

http://www.fscs.org.uk/consumer/faqs/deposit_claims_faqs/


altocumulus:
Legally honored to whom exactly?
At this moment in time do you think they give a .... ?

altocumulus

leviathan wrote: »

Indeed:

In the event of a failure of one of these banks, there would be a two step process as the home state scheme would have lead responsibility for claims, and would be responsible for paying the first part of any compensation. FSCS is only responsible for paying compensation for the topped up element to £50,000 on deposits with the UK branch. FSCS would, wherever possible, try to assist claimants in their dealings with the home state scheme (for example, by putting them in contact with the home state scheme, or helping them understand the process that the home state scheme will follow). FSCS would then deal with any 'top up' claims.

http://www.fscs.org.uk/consumer/faqs/deposit_claims_faqs/


altocumulus:
Legally honored to whom exactly?
At this moment in time do you think they give a .... ?

According to the BBC web-site, the FSCS have stated that they will take on the role of dealing with claims, so that UK savers will only have one form to fill in...

As to my comment on legal obligation - Iceland wish to join the EU, do you really think they will be allowed to if they renege on agreements?

leviathan

altocumulus wrote: »

According to the BBC web-site, the FSCS have stated that they will take on the role of dealing with claims, so that UK savers will only have one form to fill in...

Yes. You fill in just the one form, but FSCS are only processing their half of it. Internally they may put a request into Icesave, but the FSCS are only obliged to pay back the "top up" of the 50K compensation. As per the link from their own website posted above.

That's how it reads. Number of forms is irrelevent. You aint getting your first €20,000 from the FSCS!!

As to my comment on legal obligation - Iceland wish to join the EU, do you really think they will be allowed to if they renege on agreements?

The polls they've done which are somewhat outdated now suggest that most people would like to join however it is a very small majority.
It may be the case that now it iosn't in their interests to do so.
Talking to Russia for a loan is a good indicator that they are disillusioned with the European response for assistance.

If they feel that we've stuffed them by not helping despite them being in the EEA, why wouldn't they wave from afar?

martinman3

Just a thought.
As this will be the first FSCS compensation for savings where the savings business has not been bought by another bank you may see a new system implemented for transferring cash ISAs.

This is because any cash ISAs in Icesave will need to be moved to another bank/bs while keeping their tax-free status and as the payments would come from the FSCS not Icesave it may be simpler to print certificates as was done for TESSAs many years ago.

ventureuk

Don't click the link if you are easily offended by a swear word.

In summary....

http://consumerist.com/5059758/economist-sums-up-financial-crisis-oh-!!!!

Optimist

From http://www.fscs.org.uk/consumer/

FSCS gears up to assist Icesave's UK branch customers

In the light of the current uncertainties, the Financial Services Compensation Scheme (FSCS) is today gearing up in case it needs to assist approximately 300,000 savers at Icesave.

Icesave is the UK branch of Landsbanki Islands hf (trading here under the registered name Icesave). It is an EEA bank that is authorised by the Fj!rm!laeftirlitið (FME), the financial services regulator in Iceland. The Financial Services Authority in the UK has reported that Icesave is now expected to go into insolvency proceedings in Iceland and this would trigger an FSCS default.

Eligible savers with Icesave are protected by the Icelandic Depositors' and Investors' Guarantee Fund (IDIGF), up to a limit of the first 20,887 of their deposits. As an Icelandic bank Icesave is not automatically a member of the FSCS, but it opted to become a 'top-up' member. This means that eligible retail savers with Icesave's UK branch whose savings exceed the Icelandic limit would benefit from top-up compensation from the FSCS covering the amount over the Icelandic limit up to the new FSCS compensation limit for deposits of £50,000.

If the default is triggered as expected, FSCS will contact all UK savers directly with details of how to apply for compensation. Further announcements will follow and we will keep this page updated.

Please watch our website for more information.

cheekykid

Too much about how muchFSCS will guarantee and little on what happens to the savings over 50k?

leviathan

cheekykid wrote: »

Too much about how muchFSCS will guarantee and little on what happens to the savings over 50k?

Their website makes it quite plainly obvious that over 50K your only recourse is to the liquidators of the bank and you get to share in what is left.

ie: anything over 50K you might as well kiss goodbye to and feel lucky if you see it again.


Now, that's the current situation. It remains to be seen if the govt decide otherwise. And it will be a decision from them not the FSCS.
But if 95% of the people are protected, I'd imagine they are currently quite happy with that.