Icesave, why not UKsave?

nilrem_2

Rather than having to pay out to 300,000 customers why can the Government not take over Icesave;perhaps change the name to UKsave or similar then pump some cash in (they are going to pay out anyway) then offer a 100% guarantee and perhaps lower the interest paid, that way I am sure that most people would be happy just to draw out what they needed and leave the rest alone, most people only wanted their cash out because they were worried about losing it. Fixed rate deposits could carry on as before.

Could someone who understands these things explain why in these strange times they could not do that? it would surely be less costly that paying out everyone at once, any money from Iceland could be paid in to the new Uksave bank.

blizeH

From someone who has absolutely no clue how these things work, I quite like the idea of this.

TisforTesco

Yeah, I am clueless too, but it sounds like a good idea to me. I'm sure it wouldn't be simple but it doesn't sound out-and-out impossible. It would save my trying to find a new home for my ISA as people like NS&I and other 100% garanteed places currently don't seem to be accepting ISA transfer in.

nilrem_2

The thing is that the website is still working all it needs is a quick name change, a bit of capitol injected and a guarantee given by the treasury that it is 100% safe and a bits of lega stuff to be signed, these are strange times and if they can take over other banks why could they not do the same here, my idea would mean that people could get their cash moving again start the interest going, (monthly interest payments are still showing on the site anyway,just not being paid out).

It just seems to me that my idea would solve the problem much more easlly and quickly than having to pay out £4.5Bn in one go to 300,000 people!

I am sure that many people such as myself would be more than happy to leave the bulk of our cash there if we new we had a 100% guarantee and it was run by the UK, all it needs is get rid of the ICE word!

thumshie

Well, one of the reasons they can't just re-activate the website and allow people access is that certain institutions - Local government etc - are NOT getting their money back. Until they perhaps work out who these are they can't re-activate the web site..

runciblespoon

Do councils have accounts with Icesave (the retail deposit operation) or Landsbanki? AFAICR Icesave was always about just personal accounts - you couldn't open one in the name of your business.

A sensible idea, nilrem, and that's what happened in the case of B&B - a swift pass-the-parcel to Santander. And with Kaupthing Edge to ING. In both cases they were caught before they went down, unlike Northern Rock - but that's still operating (things are a bit different because NR's a UK company).

It would seem easiest to keep the existing infrastructure and transfer everything to another bank. But Icesave don't have too much infrastructure of themselves - it's all contracted out to Newcastle Building Society. So it may be a case of the new owner paying NBS to operate it, which they may not want. Alternatively the Government could just pay NBS to wind things up.

Additionally they may not wish to honour the terms of fixed rate accounts, and declaring bankruptcy is one way to break them. But it may be that the system is retained with the transfer in option removed - set so you can only withdraw money the funds would run down eventually. It would seem to make rather more sense than sending people cheques out of the blue.

Birdie100

No, the councils et al deposited in their wholesale money market operations. So whilst they were not investing via Icesave, they were investing in the parent, Landsbanki; others have invested in kaupthing, now also defunct. But the issue is that it is these banks that have gone bust, so the councils now will not see their money again. But they were hoping that like us retail depositors, the Treasury can bail them out too!

thumshie

runciblespoon wrote: »

happened in the case of B&B - a swift pass-the-parcel to Santander. And with Kaupthing Edge to ING.

This is anything but swift..Check the numerous threads. people have had BACS/CHAPS transfers going back to last Friday that are still missing, and people claiming that ING are saying transfers before the 8th(the takeover) is not their responsibility..

Mr._H_2

The problem is that you can't inject just "a little bit" of cash, you have to inject the full amount equal to all the deposits. That's what happened with B&B and presumably with Kaupthing's deposits as well. What bank would pay to owe people billions of pounds? It's not a very sound business move is it?

Presumably there are issues with doing a "simple" nationalisation of ICEsave, be they due to it being foreign-owned, political or both.

justaquickie

I've been hoping for a buyout/compromise outcome for Icesave, but I fear it may now be too late. I am very surprised how quickly all options other than liquidation/compensation were seemingly dismissed - particularly when KE/ING shows this can be viable. The treasury will hopefully consider that they will also lose a big chunk of interest revenue (if FSCS cover proves not to include interest). A going concern, where savers agree to compromise rates over a certain future and backdated terms OR can decide to take just their deposit and run, could be attractive to banks, the tax-paying public and treasury coffers. I really hope there is some creative thinking going on.

Rushing straight to cash compensation is dull, in my opinion. After all, most Icesave savers will be putting their money straight into another bank. Why not make it the same bank that can put in some money upfront for the privilege of getting the business. In short, there is significant value in grouped savings that is lost forever the moment you split it up.

pompompo

I have just spoken to Ing re missing chaps payments. Yes, their line is that they are of course not responsible for transactions initiated by KE before they took over yesterday. They say to ring KE on the 0845 313234 number. More or less permanently engaged when I try.

Has anyone managed to speak to Kaupthing re these missing CHAPS transfers today?