MSE News: Euro crisis - How safe is Santander?

atush

oldvicar wrote: »

Isn't Santander UK still a subsidiary of a Spanish bank?

If the parent were to be in trouble, would it affect its UK bank in any way? Has the parent lent it any money?

It could, if the UK subsidiery had funds in the parent bank and the parent fell. This is what happened to KSF IOM, as the UK gov seized the assets of the parent bank which included funds of the IOM sub which is what caused it to fail as it was solvent until that act by the UK treasury.

Having said this, I don't see Santander going down. And if the post above saying the UK sub doesn't mix funds with the parent is correct (many do). Lehmans NY went down having gotten the Lehmans UK funds transferred over just before it fell.

callum9999

MSE_Martin wrote: »

To those asking - why write this guide why not barclays, etc.

Simple. Over the last few weeks I have been emailed, tweeted, facebooked and stopped in the street by ordinary members of the public hearing the news about the PIGS countrys and asking about Santander. So we are answering the questions. I have not been asked those questions about the other banks.

I'm normally a big fan and have no issues with the article, the headline on the other hand is appalling and I stand by that. I don't look at the majority of threads on here but I've already read a post on one of them that cite the headline as a cause for concern of Santanders safety.

Write an article about them yes, but to create a headline which implies they are in danger of collapse is just irresponsible.

John_Pierpoint

atush wrote: »

It could, if the UK subsidiery had funds in the parent bank and the parent fell. This is what happened to KSF IOM, as the UK gov seized the assets of the parent bank which included funds of the IOM sub which is what caused it to fail as it was solvent until that act by the UK treasury.

Having said this, I don't see Santander going down. And if the post above saying the UK sub doesn't mix funds with the parent is correct (many do). Lehmans NY went down having gotten the Lehmans UK funds transferred over just before it fell.

So do we know what the eventual outcome was?

As I remember, the American authorities waited for the UK funds to arrive and then put the boot in.
But as you remind me, Gordon B grabbed the Iclandic funds, using the terrorism act.

John_Pierpoint

KTF wrote: »

The mortgage would be sold on and you would continue paying the monthly payment to the company that bought it so no change at all.

A mortgage is usually repayable on demand.
Are you sure that people will be lining up to buy these mortgages, like they weren't when Norther Rock fell.
Hullo N.Rock bad bank mortgage holders, here is one of the people who supplied you with your bail out, with a big thank you for keeping on paying instead of going bankrupt. :j

Seriously though it is looking like a few more failures of minor mortgage providers would enable Santander to put the rates up.

At the bottom of all this is the need to get rid of the debt, before it can "enslave" our grand-children.

atush

John_Pierpoint wrote: »

So do we know what the eventual outcome was?

As I remember, the American authorities waited for the UK funds to arrive and then put the boot in.
But as you remind me, Gordon B grabbed the Iclandic funds, using the terrorism act.

TBH, I don't remember, as I was trying to get my KSF money back lol (and I did plus interest BTW).

But as I remember, the UK sub asked for the funds back but the Us receivers wouldn't. So LB UK fell too. Might have anyway, but still.

And yes GB caused the fall of the IOM sub by this act. If he was right or not to do so is open for debate. I think he was wrong personally but everyone has their own thoughts on this.

It seems to me the UK and US govt use terrorist legs where they shouldn't (incl arresting UK business men) and the US doesn't always treat its UK 'friend' fairly. And I say this as a US cit.

They are all for the UK handing over whoever they want and even snatching them off airplanes and cruise ships. But dragged their heels in returning IRA suspects. Not on, really.

ed1

How safe are savings in offset mortgages as this can easily be more than £85,000?

ed1

So what is the situation with offset mortgages and the savings in them. With a mortgage this can easily be over the 85000 limit?

Thrugelmir

MSE_Martin wrote: »

To those asking - why write this guide why not barclays, etc.

Simple. Over the last few weeks I have been emailed, tweeted, facebooked and stopped in the street by ordinary members of the public hearing the news about the PIGS countrys and asking about Santander. So we are answering the questions. I have not been asked those questions about the other banks.

Then maybe the guide should have been written in a broader context. To educate people and broaden their awareness.

sabretoothtigger

oldvicar wrote: »

Isn't Santander UK still a subsidiary of a Spanish bank?

If the parent were to be in trouble, would it affect its UK bank in any way? Has the parent lent it any money?

Each bank is operated as a separate company. They have not done it yet but UK santander was going to be listed as a share in London.
As it is now, its a private share held by the main company. So they have the majority control
See how many banks they operate : http://www.google.co.uk/finance?gcx=c&q=Santander&um=1&ie=UTF-8&sa=N&hl=en&tab=we


If it had a different name maybe people would not mix the two but it'd be the same situation. They could have kept the Abbey brand and merged everything into that, probably should have


I imagine an offset mortgage is safe. They cant choose to ignore a deposit and call in a debt to the same person without acknowledging both
They wouldnt be able to call in the debt anyway, the contract stands after the bank falls?

The worst I think with that would be the offset would be fixed at the time of their close of business. So you'd get the large amount of money back but only via a reduced mortgage. Im uncertain if it qualifies under the savings scheme otherwise

jamesd

ed1 wrote: »

How safe are savings in offset mortgages as this can easily be more than £85,000?

"For example, if you had a mortgage of £250,000 and an offset savings account of £100,000 you will receive £85,000 cash compensation from the FSCS, and the liquidator with use the remaining £15,000 of your balance to reduce the mortgage to £235,000"

Under the old rules the savings would be offset against the mortgage in most cases so you'd end up with a lower mortgage but no cash. The new rules give you up to £85,000 cash and the rest is used to reduce the mortgage balance. This applies to most offset mortgage that use different accounts for mortgage and savings or current account.

If you have an overdraft-type of offset mortgage, like the one used by the One Account, the whole amount is still used to reduce the mortgage, leaving you with no cash.