85k protection.

Mr_Dudley

By too big to fail I'm looking at banks like State Bank of India - they have 14,000 branches worldwide, are the biggest bank in India and 60% state owned. No way that's going bust in my books and it pays out 4.5% on a 5 year fixed rate which is very good.

innovate

grey_gym_sock wrote: »

it means so big that the government would definitely bail them out if necessary ... this is a view about how the government will act, rather than a guarantee, but the term "TBTF" is used in governments and central banks, and i think it reflects their thinking.

I know what the term means. I don't know of any bank that has been tagged as TBTF, and nobody would ever guarantee such a status.

Lehman Brothers was not considered TBTF, despite sparking off a global financial crisis.

grey_gym_sock

yes, they don't like to say who is TBTF ... i've no idea how many are, but it's easy enough to pick the more obvious 1s and stick to them.

MarcoM

I agree with some of the posters here.
If hsbc were to fail I would think that the economic woes would be so bad that no one would get bailed out even for the 85k threshold. I may be wrong but i think that the likes of HSBC are probably safer than a santander...
We would probably be trading in beans and potatos anyway if that happened...

I just think that having ten or more 85k accounts would be a right pain.

Mr_Dudley

MarcoM wrote: »

I agree with some of the posters here.
If hsbc were to fail I would think that the economic woes would be so bad that no one would get bailed out even for the 85k threshold. I may be wrong but i think that the likes of HSBC are probably safer than a santander...
We would probably be trading in beans and potatos anyway if that happened...

I just think that having ten or more 85k accounts would be a right pain.

And this "comfort" about the strength of HSBC means they can get away with offering very low uncompetitive rates.....

As you rightly say, if HSBC go bust it's global meltdown so on that basis the only reason you would invest with them is because you have used up all other options to the £85k max.

PS - I will be opening joint accounts with my wife - it is £170k protection on that basis.

Mr D