Anyone received a CHAPS from Icesave today?

DocProc

From my own experience, it is only worth suing someone who owes you money, if they have got the money to pay it you back.

There's not much point in winning your case and proving the point, if you still don't get your money back.

For all we know, they didn't have the money in the bank to pay it back out to us.

And so they shut up shop.

We have to remember one Icelandic bank had already actually failed. I think it was newspaper articles, particularly like the one (link below) in the Guardian last night at about 6:30pm, that stimulated a wave of massive withdrawals during yesterday and last night. This one makes terrible reading.

http://www.guardian.co.uk/commentisfree/2008/oct/06/iceland.creditcrunch

br1anstorm

For anyone who like me is looking closely at who did, or did not get transactions through before the "freeze", Dinkle's post at #2 on this thread
http://forums.moneysavingexpert.com/showthread.html?t=1205477
is worth a look.

br1anstorm

DocProc

From http://www.apacs.org.uk/payment_options/chaps.html

CHAPS

CHAPS is an electronic bank-to-bank same-day value payment made within the UK in either sterling or euro.
The main benefit of CHAPS is that it is fast, secure and efficient and the money is transferred the same day. Unlike other forms of payment such as cheques, CHAPS payments are irrevocable.
CHAPS is one of the largest real-time gross settlement (RTGS) systems in the world. Banks themselves use CHAPS to move money around the financial system, but it is also used regularly:

• for business-to-business payments;
• by solicitors/licensed conveyancers to transfer the purchase price of a house between the bank accounts of those involved;
• by individuals buying or selling a high-value item, such as a car, who need a secure, urgent, same-day guaranteed payment.

CHAPS Clearing Company Limited

CHAPS Clearing Company Limited processes and settles systemically important and time-dependent payments. Key drivers for the Company are the provision of a robust and resilient infrastructure, innovation through responding to members' and market needs and the ability to do so in an efficient and cost-effective manner.

One thing that isn't mentioned in the notes above though, is that the banks who use CHAPS, have to post some liquidity into the CHAPS system. If they can't do this, then the system just fails for that particular bank.

Once it has failed, then the entries become theoretical and they have to be adjusted back to the original accounts from whence they came - together with the fee.

Fingers crossed that Icesave does some sort of deal, doesn't actually go into full bankruptcy and continues as a bank. Although, I have to say, I just cannot see it happening now myself.

But I often get it wrong.

br1anstorm

Thanks DocProc - helpful information.

My eye was caught by these two points in your text

DocProc wrote: »

(edit)
..... Unlike other forms of payment such as cheques, CHAPS payments are irrevocable.
(edit)
.... One thing that isn't mentioned in the notes above though, is that the banks who use CHAPS, have to post some liquidity into the CHAPS system. If they can't do this, then the system just fails for that particular bank.
(edit)

Surely Icesave still has - or will have - "some liquidity" whether injected from outside or realised by sale of assets. Question then becomes - what are the priorities in terms of calls on that remaining (or any new) liquidity? Will there be a hierarchy of creditors/claimants?

Specifically, I wonder whether Icesave - or whoever takes over the administration task - will honour pending or outstanding CHAPS commitments before paying out to others (eg Icelandic citizens) who make later requests to draw out their savings.

br1anstorm

somabc

br1anstorm wrote: »

Thanks DocProc - helpful information.

My eye was caught by these two points in your text


Surely Icesave still has - or will have - "some liquidity" whether injected from outside or realised by sale of assets. Question then becomes - what are the priorities in terms of calls on that remaining (or any new) liquidity? Will there be a hierarchy of creditors/claimants?

Specifically, I wonder whether Icesave - or whoever takes over the administration task - will honour pending or outstanding CHAPS commitments before paying out to others (eg Icelandic citizens) who make later requests to draw out their savings.

br1anstorm

Landsbanksi will have to follow the hierarchy of claimants, not sure about Iceland but in the UK it is

HIERARCHY OF CLAIMANTS
1 - Administrators
2 - Secured creditors - 'fixed charge'
3 - Unsecured creditors (£600,000 only)
4 - Preferential creditors - including employees
5 - Secured creditors - 'floating charge'
6 - Unsecured creditors - including customers
7 - Shareholders

eric7ru

MarketRisk wrote: »

i also did a chaps transfer, over the phone, because unable to login yesterday at 3:10pm. closed account. account closed, but no sign of the money in designated bank account.

if account closed prior to freeze then shouldn't that be legally binding?

also, is it legal to have one rule for icelandic depositors and another for foreign depositors?

we really need some legal advice.

perhaps we can set up two groups:
1. for those that completed transactions prior to freeze

2. for those that are from holland and britain and think it is illegal for differentiation between depositors depending on country of origin.

anyone know of any lawyers with expertise in this area?

i call it theft.

completely agreed:
it may sounds stupid, by still want to check couple of ideas:

• what about law case against Iceland goverment, if they announce Icesave bankrupt - surely this bank has a lot of assets , i.e. our deposits and loaned all this money to Landansbanki....in my view the reason why they still not announce it bankrupt because it will be very easy to repatriate these money from Parent bank, which kind not going under hence should pay for their obligation! this could freeze any assets of Iceland goverment in UK , which are plenty and will prevent them to sell them untill every transaction will became transparent...surely that will prove that this day light robbery of UK savers!!! Shame on Brown and Darling, they clearly do something about this !!! :mad:
• there thought - announcement that they will fully cover Iceland savers and not cover UK one is in my view clear discrimination based on your nationality - surely court in Hague will support this

in my view if we can arrange class action suite i do not think Iceland will have much to argue about this ....
so what you think - long shot? sounds crazy?
will be welcome your thoughts

br1anstorm

That's interesting, somabc. I note you are describing the UK rules. See tomterm8's post at #23 in this thread

http://forums.moneysavingexpert.com/showthread.html?t=1205191&page=2

for another take on this question.

It's all still hypothetical, of course. But it would be interesting to have authoritative info on the Icelandic rules about what priority retail customers/depositors have if Icesave really does go completely bust. What chances that eg eventual asset sales will provide any more than the FSCS compensation scheme pays out? This could matter a lot to those (like me) who have more than £50k with Icesave.

br1anstorm