Money Programme Radio 4

RayWolfe

mime20 wrote: »

Also "expert" Ros Altman saying that the icelandic banks were looking dodgy months ago and only a mug would have left money in them (I paraphrase), before the bloke chairing the discussion pointed out that she had been on the program 3 days before the collapse recommending them...

No, the program was recommending then, not Ros Altman.

Wibble

dunstonh wrote: »

There is an element of truth in that. However, like many things in the media, its taken to an extreme.

Yep, I knew that the Icelandic banks were considered riskier than others that paid less. I put my money in them as (a) they paid a fair bit more when I put the money in, (b) I thought it unlikely that they'd actually go under, and (c) I believed that my money was fully covered - maybe under a 'passport' scheme, but still fully guaranteed for the amount I was putting in.

What I didn't expect was (a) IceSave to actually go under, (b) Kaupthing Edge to also go under about a day later, (c) Iceland to appear to refuse to honour their guarantee.

So it's fair enough that I, like others, got caught out with the banks going under as I did know there was more risk. It's unfortunate that 90% of my savings were split between the two banks - while I thought that one may go under if I was unlucky I didn't expect the credit crunch to happen and for them both to go under!

What I don't think is right is that we (savers) should be glad to get our money back - the extra return was only a fraction of a percent into a bank that was fully guaranteed, it wasn't in the stock market or anything.

Had I put anything in one bank that was over the guaranteed level when it went under then I would consider myself lucky to get that back, but I think it's right that the government are making sure that we savers get our savings back up to the guaranteed level - anything over that (for those that put more in) is a lucky break for the people it affects. I don't think they should be automatically expected to lose it and accept it like you might expect an investor in the stock market, but it is over and above what the guarantee was so is fortunate for them.

Wibble

Another thing to add, though, is that while the Icelandic banks were considered riskier, it is only because of these exceptional events that this has happened. The 'safe' banks are only staying safe because the government are putting £37bn in them, plus huge amounts more into the money markets and in guarantees.

So putting your money into Icelandic banks wasn't high risk & high reward at the time, it was a fraction of a percent more return on your savings - unfortunately at a time when even 'safe' banks are needing huge intervention to prevent their collapse too.

It's just unfortunate that Iceland isn't able to prop up their banks like ours can.