Breaking News: Ing

harry_w

angiek wrote: »

Quote from Harry_W

'I do not think any ING customers have any reason to panic and should make their decisions based on their interests as a bank customer, not based on fear of the worst happening.'


...All very well Harry W but if, like me, you have very little income, what was your backup instant access savings (for Gas/Electric, Council Tax, Water, car bills etc etc etc) now tied up awaiting reclaim from Icesave, AND are now apparently in a huge queue to transfer out of Kaupthing FTD account then it is extremely difficult not to panic!
Forward planning for those on a limited budget must include 'fear of the worst happening' ?
Angie K

(ever so slightly panicking!)

It's a balance between chasing the best interest and the most solid institutions, also instant access against FTD (maybe branch access would also reassure, or a mutual, or national savings, even a credit union?).

Size matters in terms of the institution's significance and the credibility of any sovereign backing.

Ironically, your Kaupthing FTD account is probably preferable to most now available. If it was bought on rate value, and now it's been taken over by one of the largest institutions in Europe, backed by the Dutch govt. However, FTD also potentially puts a saver in a dilemma when weighing up the pros and cons of moving.

I chose ING over more exotic locations like Icelandic banks with higher rates, so I can't get the same terms as those savers rescued by ING. If I could, I'd stick with them. If I'd taken that chance, I'd feel both anxious, but also lucky having benefited from the risk and being rescued.

That doesn't apply to Icesavers though, two Icelandic accounts was the bridge too far. I expect the Icelandic government will work out a deal with UK and other EU countries, and the UK govt will need to shoulder some responsibility for it's conduct, especially for pulling the plug on Kaupthing (that could cost the UK a lot). I think the EU need to use the time gained now to stabilise capital flows among savers and investors within the Union, and on it's periphery, Central Europe and Baltics - letting Iceland go under without a struggle was a terrible mistake, and the damage must be repaired.

If it's fear of the worst happening, have accounts you can move to standing by, and stock up on non-perishable foods. Panic isn't likely to put many in a better position. Keep an eye on the papers and blogs where the first twitches about an institution are likely to appear - I could see some trouble brewing for ING in coverage in the FT, Bloomberg from the financial perspective, the Telegraph and Guardian from a consumer point of view. (See the stories I linked above, or just scan Google news for the relevant institutions periodically).

If an institution of ING's size were to go down (after the ECB's assurances over systemic institutions), it would be because the whole system was in meltdown (as the IMF warned the week before last). Many other banks, state-backed or otherwise would be going down at the same time. Then it may pay to have savings spread between institutional giants (like HSBC, Santander, ING) backed by sovereigns of some credibility (UK, Dutch, and Spain plus the EU).

More realistically, if ING gets into difficulty, the savings divisions would be sold on to another institution which would help them improve their capital ratios, as part of a consolidation of the whole sector underwritten by governments and central banks.

I think the greatest help to retail customers would be for the CDS rates for both institutions and sovereigns to be published freely, allowing people to make an informed choice trading off interest against a key measure of perceived risk. Maybe to divide their savings between higher yields and maximum security accordingly, at least then you know you've considered all you can which should help reduce anxiety.