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KorkyKat

How much Edam cheese could you buy with £7.7bn?

Why am I hearing the Dutch Prime Minister's voice from a few weeks back when he said 'Up yours Johnny Foreigner we are looking after our own first.' But in Dutch of course.

harry_w

I've saved with ING for a long time, and believe the bank is sound, especially when backed by the Netherlands Govt.

However, I've moved my savings from ING today because as a long standing customer, I'm not being offered the same rates as new customers, or the savers with Icelandic banks bought up by ING. I await the transfer, I have the confirmation number, though when I confirmed it I was sent to the home page.

Those worried by the systems offline, should know they were also offline on 10 October (for under an hour, early am) without any explanation. That happened to coincide with the Asian markets tanking, but they were back online later, and doing business as usual before the European markets opened.

For recent ING news:
http://news.google.co.uk/news?&nolr=1&q=ING&btnG=Search+News

The current story, as I understand it, is that due to the decline of the stock markets and real estate markets, ING's capital base has been eroded. That's led to a decline in the share price, exacerbating the problem, and shareholders feared their ownership may be diluted if ING asks the Dutch govt for a capital injection.

That's what ING has done today: http://www.guardian.co.uk/business/2008/oct/19/ing-bank-dutch-cash-injection

At a press conference tonight the Dutch finance minister, Wouter Bos, said the government would get preference shares in ING worth €10bn in return for the cash injection. The shares will pay the government annual interest of 8.5%. The Dutch government will also appoint two members of the bank's supervisory board - the equivalent of its board of directors. The bank is scrapping its dividend payout to shareholders and its senior executives have agreed to forfeit their annual bonuses and limit their pay-offs to a maximum of one year's salary.

ING said it would now review pay packages for the board and senior managers to link incentive schemes "to long term value creation and risk"

The funds will push up its so-called Tier 1 capital ratio to around 8% from 6.5% now. The Dutch government recently announced it had set aside €20bn to support Netherlands banks if necessary and ING is the first to apply for aid.

ING is one of the 20 largest financial institutions in the world, after the statements of the ECB last week, I don't believe it would be allowed to fail.

Even in the worst case it's enormous pools of savings, such as ING Direct, would be bought by other institutions to improve their own capital ratios (as ING bought Icelandic accounts, and Santander bought B&B savings accounts).

Savings deposits are about the most precious thing in finance right now (second only to a credible government backup facility, which ING also have), savings are not going to be allowed to disappear - at the very worst they'll be sold to another institution.

If you want to look at a Dutch perspective on ING and what the Netherlands guarantee might mean in practice read this from the week before last: http://www.rgemonitor.com/euro-monitor/253989/another_iceland

Europe EconoMonitor
Ivo Arnold | Oct 10, 2008
...Although the Dutch (and UK) authorities are now quite angry at Iceland, some Dutch banks operate in the same way as Icesave. ING Direct is a good example. ING Direct is wholly owned by the Dutch ING Group and claims to be the world’s leading direct savings bank. Ultimo 2007 ING Direct had a total of € 191.5 billion in funds entrusted outside the Netherlands. Most of these were collected by subsidiaries (in the USA, Germany, Canada and Australia). The ING Direct subsidiaries fall under local deposit guarantee schemes and pose no threat to the Dutch state coffers. Still, a sizable part (€ 62 billion) was attracted through branches in the United Kingdom, France, Italy and Spain. These funds fall under the Dutch scheme, which since October 7 implies that the first € 100,000 are guaranteed. Dutch law requires that the costs of the scheme are apportioned among the remaining Dutch banks. This would imply that domestic banks bear the risk of ING’s international expansion.

But in the hugely concentrated Dutch banking market, the law is not credible. If any of the big three banks would collapse, recouping the losses on the remaining two would start a domino-effect. In the current crisis everyone therefore assumes that the Dutch scheme is backed by the state. Right after Minister of Finance Bos broadened the scheme to € 100,000, ING Direct adjusted her websites (in a.o. France and the UK) to advertise to its clients the increased protection from the Dutch goverment. Should we worry? It depends on whether you take a foreign or a Dutch perspective. € 62 billion is a lot of money. It is about four times the total deposits of Landsbanki (the bank behind Icesave), but it is much lower than the € 208 billion of Dutch savings that are entrusted to the ING Group. Dutch GDP is roughly 40 times the Icelandic economy. The amount of € 62 billion comes down to approximately 10% of Dutch GDP. So if need be, the Dutch government can take the hit and, given its calvinistic rectitude, will take the hit. Foreign liabilities of ING Direct would increase the Debt/GDP ratio by 10%. This is a large transfer but it can be swallowed given the favourable fiscal starting position of the Dutch government (a debt/gdp ratio of ca. 45%). The credibility of the implicit home government guarantee in branche banking decreases when the size of the branche activities outgrows the size of the home economy. Iceland is an extreme case. It would take exceptional growth of the ING Direct branches to arrive at Iceland’s imbalance. So foreign savers shouldn’t worry...

Joe65_2

KorkyKat wrote: »

Why am I hearing the Dutch Prime Minister's voice from a few weeks back when he said 'Up yours Johnny Foreigner we are looking after our own first.' But in Dutch of course.

No, that pronouncement you have so eloquently paraphrased sounds much more like the Prime Minister of Iceland at the time, to which the Dutch PM was simply refusing to let him shirk his committments.

That's the sort of Dutch PM I want behind the Guarantee of my ING [c/o Kaupthing] deposit.

donnykebab

qamwc1 wrote: »

The Gordon Brown plan .

pmsl 'plan' as in haven't a fkin clue
and salty top cretin prize goes to your goodself

cwcw

Money_Grabber13579 wrote: »

I think your maybe the only one that knows that?

I've got a very little feeling that the reason the website is down is because they might be upating the systems? I wonder why I would think that now?

I don't know it, but it looks pretty likely they're stopping a run of withdrawals and providing a "systems" excuse. It's a bit of a coincidence. I don't blame them either. If they have noticed people are panic withdrawing all their cash then it's a serious threat.

cwcw

oldmanof_the_sea wrote: »

Cretin alert 4

!!!!!! alert 1.

poppy10_2

Calm down, calm down

Money_Grabber13579

cwcw wrote: »

I don't know it, but it looks pretty likely they're stopping a run of withdrawals and providing a "systems" excuse. It's a bit of a coincidence. I don't blame them either. If they have noticed people are panic withdrawing all their cash then it's a serious threat.

It seems to start with you though. And lets not start !!!!!! alert 1,2,3,4 etc.

cwcw

Money_Grabber13579 wrote: »

It seems to start with you though. And lets not start !!!!!! alert 1,2,3,4 etc.

What seems to start with me? The thread? The run on ING Direct? The global financial crisis?

Joe65_2

donnykebab wrote: »

pmsl 'plan' as in haven't a fkin clue
and salty top cretin prize goes to your goodself

Gordon surely deserves all the credit 'though, for coining that phrase that all the world leaders have now jumped on, to cover for their complete cluelessness about what to do.

Whatever it takes.

surely covers it all, while justifying every rash action and explaining nothing.
:T