Anglo Irish Bank - Why have they increased 1 yr bond to 5.75%

mickW_2

As a former customer of Anglo Irish (relieved to be a former customer) I have been following their position with their falling share price (now 0.93 euros) and I am astounded to see their web site now offering 1 year bonds at 5.75%. They only dropped them to 5.5% a couple of weeks ago. Is this a sign they are desperate for our cash? They are only covered by the passport membership of the FSA so you would have to claim from the Irish Government if they went bust. Not sure what would happen if they couldn't pay.

evenasus

mickW wrote: »

They are only covered by the passport membership of the FSA so you would have to claim from the Irish Government if they went bust. Not sure what would happen if they couldn't pay.

People would loose their money.

They know of the risks when they invest in 'foreign' banks.

eeja

evenasus wrote: »

People would loose their money.

They know of the risks when they invest in 'foreign' banks.

Sorry but I dont believe we Brits look at our Irish brethren as foreigners !
In fact they are more British than we Anglo Saxons are !
Furthermore they are as free to enter the UK as we are under the Common Travel Area.
In fact Anglo IOM is offering 5.8% and as far as security is concerned they are much safer than most UK banks .
1. Because the guarantee for savers is not £50K but unlimited
2. The resources of the ECB which backs Eire as a member of Euroland are FAR larger than that of the now down and out Bank of England .
Even UK government debt insurance (CDS)shows there is a clear risk with UK Government 'gilt edge' stock !
PS No, I am not Oirish !!

apt

Reasons for it being less safe:

1. The Irish economy is much smaller
2. Ireland has an even bigger property boom to unwind
3. Arrangements for bank recapitalisation and mergers are less adavanced
4. The so-called 100% guarantee is more a sign of weakness than strength

gozomark

apt wrote: »

Reasons for it being less safe:

1. The Irish economy is much smaller
2. Ireland has an even bigger property boom to unwind
3. Arrangements for bank recapitalisation and mergers are less adavanced
4. The so-called 100% guarantee is more a sign of weakness than strength

agree with 1 and 2.
As for 3 - watch this space - in a few days Ireland could be ahead of UK in this.
4 - disagree

in the end Ireland's biggest strength is that its in the Eurozone, and that trumps 1 and 2 to me

evenasus

eeja wrote: »

Sorry but I dont believe we Brits look at our Irish brethren as foreigners !

I do not look on the Irish as foreigners either. Infact, I'm part Irish descent myself.
Dublin is one of my favourite cities in the whole world. And I've travelled quite extensively

The point I'm making, is that the bank is not covered by the FSAC and savers know this.

gozomark

FSAC 50,000, backed by UK govt
or
Ireland backed by ECB, unlimited

I'm happy with both, but happier with the latter

earlgrey_3

One thing any Brit using a non-UK bank should bear in mind is that if push came to shove the interests non-nationals of that country in the eyes of its government will always come second to nationals of the country who have a vote. This point was made back in April concerning Icelandic banks and proved correct.

It's just something else to be taken onboard when doing the risk/return calculation and for the investor to decide.

P.S. By any definition Eire is an independent foreign country and probably very insulting to any Irishman to suggest otherwise. The Republic of Ireland is a sovereign state, its citizens describe themselves as Irish, not British, and would regard anyone describing them as British guilty of gross ignorance.

evenasus

earlgrey wrote: »

P.S. By any definition Eire is an independent foreign country and probably very insulting to any Irishman to suggest otherwise. The Republic of Ireland is a sovereign state, its citizens describe themselves as Irish, not British, and would regard anyone describing them as British guilty of gross ignorance.

This is very true.

cos69

Anyone know where the information that the ECB backs the Irish banks can be found ?

gozomark

cos69 wrote: »

Anyone know where the information that the ECB backs the Irish banks can be found ?

Ireland backs the banks, ECB backs Ireland - if not Eurozone collapses