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The "I got out of jail" on Icesave thread...
Comments
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Well done, people, glad to see this situation will eventually have a happy ending, also glad to see you are giving credit where it's REALLY due.
although there was little the Chancellor could do.
no, ebyard, not entirely true. An obscure, foreign internet banking failure is VERY different to a major UK bank failure with queues along the High Street.
The government could have stuck to the rules on this one. Thank your lucky stars they didn't
Exactly, it would have been v v easy for the government to stick to the £50K limit and say anything above that is tough !!!!!!, as we knew the rules and let's face it, we've all been branded "middle class rate chasers" on here so that gives you an idea of the Great British Public's opinion...
For the fact they didn't leave us high and dry we can be eternally thankful....0 -
jauntyanglejauntyangle wrote: »How should the Chancellor have prevented you from putting your money in an Icelandic bank?
Government should be very tough indeed going forward on any foreign bank that wants to take retail deposits from British savers. They physically cannot do it (short of fraud) unless they are operating under FSA authorisation. This should become VERY difficult to obtain and to keep. The ability of the foreign government to repay the debt should be closely scrutinised.0 -
jauntyangle wrote: »How should the Chancellor have prevented you from putting your money in an Icelandic bank?
The FSA should not be allowing foreign banks to operate in the UK and take UK deposits if the compensation scheme is inadequate. That would have prevented us all from depositing money there.
Ultimately, when the FSA are saying that £50k (then £35k) is guaranteed then customers will take that at face value and rightly so. I didn't read one single warning from official sources saying that the first £16k of my deposits was at risk because of a woefully underfunded foreign compensation scheme. On the contrary, I read I had the same protection as full FSCS member banks, albeit the process may be a little more bureaucratic. On that basis I signed up. It isn't up to retail customers to carry out credit checks on countries - that should be up to the FSA.
Because of that, Darling had no choice but to guarantee the first £50k of each Icesave customer's deposits. The only bit he had choice over was the amounts over and above the £50k, and I'm glad for those that have over this amount that they are still protected and hope they learn from it in future. I certainly have learnt to avoid this "passport scheme". Hopefully the FSA has too.0 -
no, ebyard, not entirely true. An obscure, foreign internet banking failure is VERY different to a major UK bank failure with queues along the High Street.
The government could have stuck to the rules on this one. Thank your lucky stars they didn't
It's not about the money in this case, hard though it would be to lose x thousand (me, £2564.44 in Icesave is what I would have lost) but about the "message" it sends.
Quite simply, if we had lost out to a bank who were active in the UK and advertised heavily here, and are part-protected by UK FSA/FSCS, then it sets a prescedent should any other bank - large or small - fail, which would undermine confidence, which in our 24-hr news age is all too easy to do, and thus bank after bank would fall. It is all about confidence.
Darling had NO choice but to rescue Icesave customers, just as he had no choice over Northern Rock.0 -
jauntyangle wrote: »How should the Chancellor have prevented you from putting your money in an Icelandic bank?
By not allowing the FSA to grant Icesave licence to operate in the UK with what has turned out to be a measly-mouthed guarantee....
No passport schemes should be allowed....0 -
On the contrary, I read I had the same protection as full FSCS member banks, albeit the process may be a little more bureaucratic. On that basis I signed up. It isn't up to retail customers to carry out credit checks on countries - that should be up to the FSA.
Completely agree. When I signed up almost two years ago, I read through the explanation of the passport compensation scheme and was lead to believe the only hassle might be a slightly more complicated claims process - but that ultimately the protection was the same, just under a difference scheme. Nobody really looks at the ability of that scheme to pay out until it's too late.0 -
It's very simple really.
There isn't a bank and has never been a bank that could survive a run. As such, to take your money out purely because you believe a bank is unsound is to help make that bank unsound.
_IF_ Glitnir hadn't been nationalised and _IF_ Iceland had accepted a bailout from the IMF (instead of turning their nose up to it -- the muppets) and _IF_ customers here hadn't panicked then it is perfectly possible that Landsbanki would still be standing.
Personally, I'm kind of glad I wasn't part of the run and I hope that the lesson that most savers take away from this mess is that they should keep their faith in their banks because if we all start to panic over a British bank it will fall just as easily.0 -
That's why I stick with buidling societies and Coop bank - they don't have share-holders, so there is no risk of share prices dropping alarmingly and causing people to panic and withdraw their money. Yes, smaller building societies do get into trouble, and do get taken over - but I bet when Derbyshire and Cheshire got into difficulties and were taken over by Nationwide, many (if not most) people didn't realise till the deed was done.
Even safer (in my view) are the local building societies who only lend to local residents as they depend on savings to fund their lending. In my area there are the Leek Building Society and the Hanley Economic - not the highest rates, but they have local branches and you can go in and get your money when you need it.
I'm not a luddite, I do have an internet account for day-to-day convenience, but I do prefer bricks and mortar building societies.
Oh.... and no passport schemes to worry about with home grown building societies.I'm a retired employment solicitor. Hopefully some of my comments might be useful, but they are only my opinion and not intended as legal advice.0 -
It's very simple really.
There isn't a bank and has never been a bank that could survive a run. As such, to take your money out purely because you believe a bank is unsound is to help make that bank unsound.
_IF_ Glitnir hadn't been nationalised and _IF_ Iceland had accepted a bailout from the IMF (instead of turning their nose up to it -- the muppets) and _IF_ customers here hadn't panicked then it is perfectly possible that Landsbanki would still be standing.
Personally, I'm kind of glad I wasn't part of the run and I hope that the lesson that most savers take away from this mess is that they should keep their faith in their banks because if we all start to panic over a British bank it will fall just as easily.
Agree. It wasn't that people on these forums saying don't panic were stupid, it was just that they were the ones bright enough to see that a run could bring a bank down...0 -
Agree. It wasn't that people on these forums saying don't panic were stupid, it was just that they were the ones bright enough to see that a run could bring a bank down...
Actually, I think those people were stupid, and crooked, too.
They hoped to safeguard their investments by luring others into propping up the Icelandic banks using their own savings. The disastrous outcome illustrates the flaws to that mindset.
This forum has a teeny-weeny influence. Icesave had over 300,000 depositors and I bet less than 1% of those people ever visited this forum. Hardly an influential venue.
Contrast the forum's minuscule propaganda impact to that of the Murdoch media empire, for example. Sky News, The Times, The Sun, et al, played a crucial role in crashing the Icelandic banking sector.
In the scheme of things, this place is a backwater.
Those people here who feared a bank run but figured they could prevent it by denying it could happen, remind me of King Canute. According to the legend, the courtiers to the norse king believed he could hold back the waves.
Fools.Henry Huntingdon, the 12th century chronicler, tells how Canute set his throne by the sea shore and commanded the tide to halt and not wet his feet and robes; but the tide failed to stop.
According to Henry, Canute leapt backwards and said 'Let all men know how empty and worthless is the power of kings, for there is none worthy of the name, but He whom heaven, earth, and sea obey by eternal laws'.
He then hung his gold crown on a crucifix, and never wore it again."If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks will deprive the people of all property until their children wake up homeless on the continent their fathers conquered."
-- Thomas Jefferson0
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