Very worrying stop press news re Anglo Irish

melbury

I know that I sound totally irrational and hysterical (my OH tells me this) but it is our life savings tied up in that bank - no doubt a drop in the ocean to the powers that be there, but everything to us and to lose it would just be unthinkable.

I do appreciate that a run on the bank would be very detrimental, but then why have they been paying some people out purely because of the reason I stated to them - i.e. change in T&C's. If they had just refused everybody and not given some their money back, surely that would have been fairer all round.

soulsaver

EalingSaver wrote: »

I do. Easy Access, and 2 fixed terms. One matures in a weeks time, the other won't mature till June/July time. As illogical as it is - and I'm not superstitious or believe in this type of thing - but eerily reminiscent of the time I had a fixed term mature at IceSave about 4 days before Iceland went into meltdown. Oh and my father has too.

But Ireland is not quite Iceland: its part of the eurozone. And the rest of the EU goverments are desperate to see Ireland ratify the Lisbon treaty after it was rejected in the last referendum. And apart from those two very major political factors, the fact that it is in the Eurozone does mean it won't get caught in the additional bind of an unstoppable run on its currency. Given that Anglo Irish is already nationalised, the sequence of events required here would be:

a) Ireland teeters on bankruptcy
b) Eurozone banks don't step in
c) IMF is unable to step in

Or they do but Irish government for some reason refuse to honour deposits. AS Anglo Irish is already nationalised, surely this wouldn't be a case of not honouring its compensation scheme when a bank went bust, but rather it would be a simple case of theft by the sovereign government.

Ah well, anything is possible in these times. Anyone know where I can find a large matteress?

IMO:
One of the other big Irish banks will have to fall first, & Anglo then calls in all its loans in arrears. Or ALL its loans.
Which is what brings about the start of those sequence of events.
IMO somewhere in the sequence HMG repays at least FSCS limits* to depositors in Anglo UK, a deposit taker in the UK, regulated fully in the first instance by the HMG (FSA). HMG then seeks eventual reimbursement from Eire possibly subsidised by ECB/IMF.
*And I think there is a case for ECB to pay Euro wide depositor protection levels €100k. There a numerous possibilities for compensation - the best of which is that none of 'em are needed..

melbury

soulsaver wrote: »

IMO:
One of the other big Irish banks will have to fall first, & Anglo then calls in all its loans in arrears. Or ALL its loans.
Which is what brings about the start of those sequence of events.
IMO somewhere in the sequence HMG repays at least FSCS limits* to depositors in Anglo UK, a deposit taker in the UK, regulated fully in the first instance by the HMG (FSA). HMG then seeks eventual reimbursement from Eire possibly subsidised by ECB/IMF.
*And I think there is a case for ECB to pay Euro wide depositor protection levels €100k. There a numerous possibilities for compensation - the best of which is that none of 'em are needed..

An earlier poster on here said that they had contacted the FSA and were categorically told that no way would the UK compensation come into play if Anglo Irish Bank/Ireland defaulted, which I didn't think was very reassuring as the bank does trade in the UK.

I just hope somebody would be willing to help.

EalingSaver

soulsaver wrote: »

IMO:
One of the other big Irish banks will have to fall first,

Agreed, or the country goes bankrupt leading to a general run anyway.

soulsaver wrote: »

IMO:
IMO somewhere in the sequence HMG repays at least FSCS limits* to depositors in Anglo UK, a deposit taker in the UK,

Agreed, which is why I'm keeping any deposits to 'passport' based banks below the FSCS limit regardless of the level of home country cover, (in theory unlimied in the case of Ireland, for ING 100k Euro)

soulsaver wrote: »

regulated fully in the first instance by the HMG (FSA). HMG then seeks eventual reimbursement from Eire possibly subsidised by ECB/IMF.

Umm. this is the slight fly in the ointment. I think that in the case of EU banks - as opposed to non-EU banks operating in the UK - that in fact HMG/FSA actually has no say in their regulation (as opposed to Icelands banks). But I may be wrong. This does give HMG the one excuse to pass the buck entirely - unlike say IceSave where the arguement could be that the FSA and therefore by implication HMG had some moral responsibility based on the fact that they granted them a banking license.

soulsaver wrote: »

*And I think there is a case for ECB to pay Euro wide depositor protection levels €100k.

Agreed. The ECB and the general EU political class would not want to leave Ireland swinging in the wind. Unless of course if by the time something catostrophic happened the whole EU finanical system was in such a state that it had reached the point of each for their own. Which is not an impossible scenario, but would also imply the breakdown of the Eurozone at the same time.

EalingSaver

melbury wrote: »

An earlier poster on here said that they had contacted the FSA and were categorically told that no way would the UK compensation come into play if Anglo Irish Bank/Ireland defaulted, which I didn't think was very reassuring as the bank does trade in the UK.

Yes, but of course they would say that wouldn't they at this stage. There hardly going to take the onus off Ireland when it has undertaken to underwrite 100% of all savings regardless of value.

And strictly speaking they are right regardless of what happens in future. Why? Becausae the FSCS scheme is 'funded' (by future comittments) by the commercial participants i.e. FSCS covered banks, not by the government. So there is no way they could invoke the FSCS scheme per se i.e. a call on future payments by UK (sic) banks to cover compensation payments.

And the same would have been true with IceSave, although in this case a portion would have been covered by the FSCS scheme. But presumably the max HMG could wring out of the commercial parties to the FSCS scheme would have been that legal binding portion. The rest would have been underwritten by HMG i.e. based on what assets it could get back from Landsbanki (if any), the Icelandic government (basically square root of zero) and the rest coverd by the UK taxpayer.

IMHO if Ireland was to go bust, the next step would be to the ECB/Eurozone governments.

baffcat

I invested £25k in a fixed rate Anglo Irish bond in September, when they were members of/covered by the FSCS. Personally I'd be very surprised if HMG could or would turn their backs on savers who'd opened accounts when covered.

Mind you, I would also have believed that HMG would realise they're shooting themselves in the foot by lowering interest rates when there are seven times as many savers as mortgage holders, so what do I know?

melbury

So is the general consensus that Ireland would not be allowed to go under? Somebody would step in and bail it out? I do hope so.

joemardo1

Being an Irish person myself with a bond to mature soon, I will be moving it from anglo.

Although I am fairly certain that the worst won't happen like anglo's depositors loosing their money, certain program on RTE (irelands national tv ) about the banks here and developers defaulting on their loans is very worrying (this was one of anglo's main businesses in fact anglo is more geared towards the business developer community than the individaul depositor)

Although I feel the worst case scenario won't happen I do feel that things will get a lot lot worse with the Irish economy which will also affect the banks and that is why I will sleep easier in my bed knowing that my money is covered with the uk scheme (though that is probably not 100% secure either maybe)

According to anglo its all a lot of media hype its a secure stable bank (talked to a manager there about getting money out sooner) but its all decided on a individual basis and penalties may apply. I will leave money into maturity date in about 3 weeks time.

Joe

jack_spratt_2

This was relayed to me an employee of the FSA !! the Irish economy is one of the UK top ten trading partners any collapse would have major implications on our own economy.
A lot of the speculation on here does not help !! its facts that are important and that is the only thing to consider .
Financial journalists who make jokes about the difference between Iceland and Ireland are uninformed and should really question if they are more interested in selling newspapers than reporting on the facts
If it was that easy to predict if any bank or currency were in trouble many people would not have been tangled up in the Iceland crisis

SouthCoast

Ireland - Meltdown approaching fast


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