NI Presbyterian mutual society, Short of funds for withdrawal?

sharkey8

freddiemae wrote: »

Also Stormont inquiry into Credit unions/mutual societies 2007 referred to in BBC article above.
http://www.niassembly.gov.uk/enterprise/2007mandate/research/creditunion.htm

According to the BBC article NI govt knew there was no financial guarantee for savers in credit unions/mutual and industrial societies. There are also restrictions on "banking practices" carried out by the societies - this may be what Mark Durkan was alluding to on Channel 4 news.

Without wishing to spread undue alarm there is an serious implication here. This would mean that if the government decided to bail out the PMS they would be potentially liable for all the other unprotected credit unions as well. This liability would/could be up to £1 Billion.

freddiemae

sharkey8 wrote: »

Without wishing to spread undue alarm there is an serious implication here. This would mean that if the government decided to bail out the PMS they would be potentially liable for all the other unprotected credit unions as well. This liability would/could be up to £1 Billion.

I did not want to be alarmist but I read this into it too. This is probably why the UK government originally refused to help and referred the matter to Stormont. I previously said that you need to look at different avenues for compensation rather than focussing solely on Gordon Brown. Again a lot depends on whether the members decide to carry on or liquidate.

From another financial forum "professional indemnity insurance is standard among directors of financial companies" - this would provide compensation if the directors acted outwith their remit. You would need to ask the administrator if the directors had this cover.

crazymess

Don't worry - we will be exhausting every avenue to get our savings returned in full.

However the Government can sort this immediate problem out - and make new legislation that all other credit unions from here on in get covered. Simple!!!!!!!!!!

Although I still think DETI ............ know something>>>>>>>>>>>>

crazymess

Where have all the main names of this blog gone??????????

Come back please ...............................

Nomad25

Not a major name, but I'm still here. Waiting to see what transpires tomorrow.

Has anyone heard anything in their church today?

expat68

sharkey8 wrote: »

Without wishing to spread undue alarm there is an serious implication here. This would mean that if the government decided to bail out the PMS they would be potentially liable for all the other unprotected credit unions as well. This liability would/could be up to £1 Billion.

I don't think this is particularly alarmist and given what the government is in for already another £1billion is really in the roundings. Also remember that this is a guarantee for that amount - not a bail out. In addition the assets of credit unions and mutuals will be higher quality than the continually repackaged and recycled sub prime debt that the banks were carrying. Thats before we get to dodgy loans to Russian billionaires.

In the longer term the selective use of guarantees for large institutions will lead to loss of competition and market dominance and abuse by big banks. Already look at the reluctance of the major banks to lend despite massive government liquidity injections.

Everyone is saying this is an issue for PMS only but the selective bail out of banks will cause problems for everyone in the long term - look at the spread on saving and lending rates for the big banks currently, sign of things to come.

joylikes2shop

AS USUAL THE LONG POST I'D BEEN WORKING ON 'DISSAPEARED' SO -LUCKY FOR YOU- HERE'S THE SHORTENED VERSION....

I believe its important to hear EVERYONEs view on the current PMS situation,even if we don't agree :mad: :mad: .....this will prepare us for dealing with negative comments and feedback in the future.I've already been able to confidently argue back to people who don't have a personal involvement in the PMS and don't see why the government should help.I have only been able to do this because of information I've picked up from following this thread from the start.

This site has been invaluable to any PMS investors who've been lucky enough to find it.:T :T
The idea of a new website has already been tried, but didn't take off.
Who'd have the time to 'police' it ? How would the 'nice investors' and the 'trouble makers' be vetted ? etc etc...
I believe that at some stage in the future, a members action group should be set up.....like the one set up by Equitable life policy holders.....

(''The independent action group for current and ex Equitable Life policyholders, funded by contributions'' http://www.emag.org.uk/)

but until the Administrators report is published and meetings are arranged to put people in touch with one another to set up such a group, I think for now this website remains an invaluable source of information.
Remember, any abusive posts can be referred to the MSE team for removal, but in the meantime, if we can all remain objective (not easy when we are feeling vulnerable and under personal attack by any negative comments) and if all comments are made in a constructive way, I think we should welcome the opportunity to exchange our information and thoughts.

expat68

http://www.newsletter.co.uk/news/PMS-petition-putting-pressure-on.4933117.jp

Hey - if Peter Robinson and Martin McGuinness can agree on this who are we to have arguments about guarantee or no guarantee.

sickasaparrot

expat68 wrote: »

I don't think this is particularly alarmist and given what the government is in for already another £1billion is really in the roundings. Also remember that this is a guarantee for that amount - not a bail out. In addition the assets of credit unions and mutuals will be higher quality than the continually repackaged and recycled sub prime debt that the banks were carrying. Thats before we get to dodgy loans to Russian billionaires.

A very valid point which appears to have been overlooked by some people.

sharkey8

expat68 wrote: »

I don't think this is particularly alarmist and given what the government is in for already another £1billion is really in the roundings. Also remember that this is a guarantee for that amount - not a bail out.

I think that you are being too complacent in your approach to this issue. We are currently immersed in an unparalleled financial crisis. The UK economy is especially vulnerable due to its over-dependence on the property and financial service sectors. Assuming they accepted liability, at the very least the Government would have to establish a contingency fund to meet the anticipated risk. This would involve mapping the potential extent of any liability. I suspect from reading your previous posts that you have a very good knowledge of the banking sector, so why are you downplaying this??

expat68 wrote: »

In addition the assets of credit unions and mutuals will be higher quality than the continually repackaged and recycled sub prime debt that the banks were carrying.

How can you be so certain? If the experience with the PMS is anything to go by the level of risk attached to loanbooks and exposure to the property sector could be high. With the current nervousness amongst investors another run on cash like that experienced by the PMS would probably have a domino effect.

expat68 wrote: »

Thats before we get to dodgy loans to Russian billionaires.

So what is the difference in risk terms in lending to Irish property developers??:huh:

I do not want to appear to be a "troublemaker" but you really do need a reality check on here.