Very worrying stop press news re Anglo Irish

masonic

melbury wrote: »

No, sorry but I think you are mistaken.

I have just looked out my original paperwork from them when I took out my bond and this what it says, bearing in mind of course this was before the the figure was raised to £50,000, quote:

Anglo Irish Bank is authorised by the Financial Services Authority to receive deposits in the UK. Anglo Irish Bank is a member of the Financial Services Compensation Scheme in the UK. Payments under the scheme are limited to 100% of the first £2,000 and 90% of the next £33,000 of a depositor's total deposits with Anglo Irish Bank subject to a maximum payment to any one depositor of £31,700.

I also telephoned them twice to confirm this fact because I was so jittery after the Northern Rock debacle.

All I can say is that the information you've been given is correct, but incomplete. Anglo Irish bank was a member of the FSCS prior to September 2008 and they have correctly stated the normal limits of the FSCS scheme. However, Anglo-Irish was registered with the European passport exemption, meaning that the first €20,000 was covered by the Irish Depositor Protection Scheme and the remaining balance up to £35k initially was covered by the FSCS. This article, dated March 2008 (around the time of the Northern Rock problems) clearly states Anglo-Irish's compensation position at that time. There really isn't a lot of information going back further than that (nobody really cared enough about the compensation system for the passport exemption to be newsworthy), but it seems highly unlikely that Anglo-Irish changed the nature of their registration with the FSCS between the time you opened your account and the date of this article.

Are my savings protected? 28 March 2008
...
Question: I am anxious about a fixed rate bond held with Anglo-Irish bank, which I understand has the 'passport' scheme. I don't quite understand how this works and wonder how much protection I would have if the worse happened?

Answer: Under the passport system, you seek compensation from the host country of certain foreign banks up to its limit and are then topped up to £35,000 by the UK's FSCS.

So in the case of Anglo-Irish Bank, you would receive £14,000 under the Irish compensation scheme and seek the remainder from the FSCS.

masonic

soulsaver wrote: »

The fact that its not in the FSCS is not a decision of the bank, its EU law.

It's also somewhat irrelevant, as even if it remained a member of the FSCS, there simply wouldn't be any protection available to savers from that scheme (as was the case between September, when the Irish limits went up, and November when Anglo ceased to be a member of the FSCS).

phoebe03cat

So am I missing the point here? Any reasons why a one year bond, taken out now to mature Jan 2010 wouldn't be a safe/ish bet?

gozomark

the risk is Ireland defaults on its debt (and as a consequence would presumably be forced to leave the Euro) - the probability of that happening in the next year is very very small,but still bigger than it was 2 years ago, as is the case for most countries in the world

melbury

So please give me some reassurance here, is my money safe until November? or is Ireland going to go bankrupt before then? Should I draw it out and pay the penalty?

I know that in reality nobody knows the answers to the above questions, but it helps writing them down!

melbury

Just read this on thisismoney.co.uk site dated 16/01/09:

Quote:

However one cannot forget that Irish banks are some of the safest places to save in the world. Along with Allied Irish Bank, the Post Office, and Bank of Ireland – as well as the UK's Northern Rock and National Savings & Investments - all deposits with Anglo-Irish Bank are 100% safe.


Phew!!!! This sounds good news, at last:T :T

masonic

melbury wrote: »

So please give me some reassurance here, is my money safe until November? or is Ireland going to go bankrupt before then? Should I draw it out and pay the penalty?

I know that in reality nobody knows the answers to the above questions, but it helps writing them down!

I'm keeping my money there until November and I'm considerably less worried about its safety now than I was a month ago.

melbury

masonic wrote: »

I'm keeping my money there until November and I'm considerably less worried about its safety now than I was a month ago.

Funnily enough I didn't even know there was a problem until last week when I happened upon the news by chance. Talk about ignorance is bliss, that was me:rotfl:

baby_boomer

FT

Moody's has downgraded Greece and threatened to downgrade Spain, Portugal & Ireland.

"Is there really a risk of a government defaulting?Jean-Claude Trichet, European Central Bank president, said last week he would “totally exclude” such a possibility. What worries financial markets is that it is unclear what would happen in such an extreme scenario. Eurozone governments have a mutual “no bail-out” arrangement, and it is not obvious what role the ECB could play. But in a worse case scenario, a rescue by a multinational institution such as the International Monetary Fund would probably be arranged."

cepheus

I opened a bond several years ago on the basis that the bank was at least partially covered by the UK scheme, on the worst case assumption that the Irish scheme may not be able to pay out in full if the country went bankrupt through it's liabilities. If there was any change to this rule, surely by law we should have been told?