Kaupthing Edge CHAPS Transfer

agsnu

If you're interested in the mechanics, feel free to read
The Kaupthing Singer & Friedlander Limited Transfer of Certain Rights and Liabilities Order 2008

yowza

I'm with goodethernet here.
Companies do buy up other companies that have debts. Even banks buy other banks that have large debts. But ING didn't get all of KE, they only got the deposits. The money making end of a bank is in its loans. Not sure what kind of loans KE made or who is managing them now. But the Treasury statement was specifically about the transfer of depositors funds alone. Deposits are liabilities not assets - so they would need some payment by the Treasury. However, now ING has these deposits they can indeed use them to convert into future loans, once they know how many depositors will stay.

yowza

Excellent post, agsnu. Where did you find that??

Looks like, by a circuitous claims route, the Treasury paid ING the full value of KE deposits. That's how I read it. And the Treasury is claiming it all back from Kaupthing or their administrators.

cheekykid

I don't understand how you can convert a deposit into a loan given that the depositor can take his money out anytime he wants? Surely the bank must have a pool of cash regardless of the deposits? if not how do they know which cash to loan and which not?

Would appreciate if someone can explain how this works so we newbies in these things can understand.

yowza

Hi cheekykid.
Look up fractional reserve banking on Wikipedia. Once your head's beginning to swim you'll know all you need to know. I'm getting some shut eye now.

I,M_SAD

Morning all.Bit disappointed to see money not in account.Have to go to work,so will keep busy again and crossing fingers for tomorrow.Good luck everyone.x

goodethernet

bgeeees wrote: »

That is not quite how business works. I am involved in buying and selling companies. It is quite common for a company to BUY another company's debt. The reason you buy another company's liabilities is that you also buy the customers, which you can then sell other products to.

I understand all that but the only way that ING would have paid anything is if they got assets too, which they didn't, unless you believe that KE was actually in possession of the cash to pay their depositors out. I simply don't believe they were. They took on the depositors of K Edge in the UK and Heritable. I don't see any assests there, just liabilities (less a new customer base whihc sould be regarded as an asset, but not worth $2.5bn)

In the end I don't realy care as it will all come out at some point. The plain fact is that ING would have to be CRAZY just to BUY the DEPOSITS and as I said before, somebody must have paid them something to take those deposits on.

goodethernet

yowza wrote: »

Excellent post, agsnu. Where did you find that??

Looks like, by a circuitous claims route, the Treasury paid ING the full value of KE deposits. That's how I read it. And the Treasury is claiming it all back from Kaupthing or their administrators.

Exactly. That's the point I have been trying to make. It was a good move by AD/GB (for once) to protect people's savings by transferring them into a well rated bank without another messy FSCS claim. KE was bust. There were no assets and the value of $2.5bn of deposits to ING was therefore MINUS £2.5bn. i.e. the government paid them to take it away.

All this stuff about the value of the deposits (£0.5bn for example) left in KE deposits is just wrong. KE was broke, it had no money!

chkurz

so nobody has received any money on this morning yet? (i assume as otherwise there would be some posts). I'm still waiting for my transfer from mon afternoon...

Celt08

No still no money in my nominated account ...

I thought CHAPS began at 6am ...