Icesave - A bit of bad news

Stormy

Thanks for that Rapid.

Dont_Panic_4

FSCS just posted this on their site. Should clear up a few things...maybe




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.
EC6675F4-A75F-6BA0-4AF9-2E08C9BE0F80
1.02.05

[EMAIL="abuse@moneysavingexpert.com?subject=Reporting%20post%20http://forums.moneysavingexpert.com/showpost.html?p=14775277"][/EMAIL] EC6675F4-A75F-6BA0-4AF9-2E08C9BE0F80
1.02.05

Leon_W

Which leads to the interesting fact that someone who has the £50,000 saved will get back £33,000 but those with less, absolutely nothing if the FSCS is not prepared to guarantee that portion. I can't see how the IDIGF can possibly fund their "guarantee" portion as the country whilst not actually bankrupt is very nearly bankrupt.

greenleaf_2

Stonk wrote: »

My question, if anyone can shed any light: is there a reliable source that says our compensation will include accrued interest? Lots of invidividuals on various forums say so, but a confirmation from a reliable FSCS source is conspicuously absent. This will be quite a significant sum for me, with a large fixed rate account due to end this Friday.

Hi Stonk

There was a discussion about whether accrued interest is covered by the FSCS yesterday on Motley Fool:

http://boards.fool.co.uk/Message.asp?mid=11253578&sort=whole

Initially FSCS were saying that accrued interest is not covered, but they then changed their tune and said that accrued interest is covered, but only up to the date when a bank goes into liquidation

greenleaf

langtoft_lad

Leon W your comments are inflammatory & ignorantly speculative... unhelpful.

Have you any basis for your assertion that the IDIGF can't fund their portion of the guarantee?

1. 300,000 Icesave customers @ £16k is approx £5bn (if I've got my zeros correct) hardly a huge amount in terms of national economics (even a small one)
2. The scheme is backed up by Scandanavia
3. Landbanski may not be insolvent per se, just suffering liquidity problems as panic stampedes the herd. Apparently their branches are still open in Iceland.
4. Should IDIGF fail to fulfill it's obligations, even with Scandanavia's backing, and Russia's £4bn loan then I would expect that depositors would have a legal claim against our own FSCS for that amount.

Stewster

Leon_W wrote: »

Which leads to the interesting fact that someone who has the £50,000 saved will get back £33,000 but those with less, absolutely nothing if the FSCS is not prepared to guarantee that portion. I can't see how the IDIGF can possibly fund their "guarantee" portion as the country whilst not actually bankrupt is very nearly bankrupt.

Leon, if the IDIGF can't fund any potential payouts then the other Scandanavian countries will step in and pay out.

Jeddy

Just a theoretical question (I hope), as I recall if you realise a loss on an investment you can claim it against future gains on a tax return, I wonder if the worst came to whether the govt would allow us to do similar for savings (which previously this was never relevant to).
Still, I'm sure it won't come to that will it :rolleyes: