need some advice on RBS and ISA's

Boing_2

Hi, i just had a few general questions on this.

1) if RBS is 70% owned by the government can it still fail as a business? i have substantial savings and i'm getting twitchy, thinking of transfrring it to HSBC.

2) If i transfer my ISA is there a fee or financial penalty of any kind?

3) How many times can you move an ISA, any limits? HSBC is stable but offers very poor interst rates so this wouldn't be a long term move.

any feedback is appreciated, thanks.

mrposhman

I don't think theres any limits and I don't think you are charged. I wasn't when I transferred my ISA into my PO ISA. I only had a small amount in it anyway (ie. under £100) so maybe there is for larger sums.

In my opinion its unlikely that RBS will be nationalised and likewise for LLoyds. Their problems aren't that they can't run their businesses but that the government wants it to do something outsid of normal business strategies. When capital assets lose their value (remember liabilities haven't) then the banks net assets fall and therefore they want to increase them. They could lend more to create more assets but these are seen as more risky than in the past so they would rather protect their capital, ensure the remainder of their capital is secure and not toxic and then begin to get back to proper banking practises. Unfortunately this takes time (more time than Brown would like) so Brown keeps fiddling and making things more complicated.

This and shorting has been brought back in which has reduced the share price but as long as fear doesn't overtake people and we don't see queues round the block like we saw at Northern Rock then theres no reason why we should see the bank nationalised.

Have faith and keep calm. I'm trying to keep calm but have lost out massively due to shorters in Lloyds but I still don't think any further nationalisation will occur, especially not full nationlisation.

Boing_2

Thanks for that mr poshman. Just one more point as you seem fairly well up on this stuff, i was reading that the FSA's savings guarantee isn't actually paid out by the government but by the banks themselves and that it's never actually been tested on a large scale. the implication was that as the entire banking network is short of cash that there may not be the funds to actually pay out large scale guarantees.

have i been misinformed on this as it seems bizzare that private banks would pay out for a rivals customers?

dunstonh

i was reading that the FSA's savings guarantee isn't actually paid out by the government

Thats because its not a Govt guarantee.

that it's never actually been tested on a large scale.

It has been tested. Icesave recently used the conventional method but Bradford and Bingley used the FSCS in a different way which didnt require account holder input.

the implication was that as the entire banking network is short of cash that there may not be the funds to actually pay out large scale guarantees.

The FSCS is funded by all financial services companies. banks, insurance companies, mortgage advisers, IFAs, brokers etc. The Govt doesnt provide any funding to the scheme other than loans which have to be repaid. The Govt is the last resort if there isnt enough in the pot.

it seems bizzare that private banks would pay out for a rivals customers?

Tell me about it. I do begrudge at times paying for events and companies that have bad/failed models when a number of the things that I pay for cannot happen to may company. However, that is what insurance is for I suppose.

Boing_2

ok, thanks for the info dunstonh.