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It's Time Savers Took Their Medicine
Comments
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Lenders were allowed to become reckless partly by being provided with capital from people who could chase high returns with no risk.
I didn't think the returns were sustainable (particularly in Icesave which I thought was an accident waiting to happen) but still had to insure those who didn't need to care.
When we invested/saved in Icesave we knew that anything above £35k or was it £38k was at risk. It was G Brown that decided to protect all our Icesave deposits.
I was of course very grateful, but I was willing to take the hit above the level stated, as were all the other depositers.This is an open forum, anyone can post and I just did !0 -
When we invested/saved in Icesave we knew that anything above £35k or was it £38k was at risk. It was G Brown that decided to protect all our Icesave deposits.
I was of course very grateful, but I was willing to take the hit above the level stated, as were all the other depositers.
It was Alistair Darling - he decided to cover all depositors to the tune of £3.5bn. £2.3bn of that is owed to the exchequer by Iceland under the terms of their deposit guarantee scheme and they won't start paying it back until 2016 and it's interest free too!
I don't think you can speak for the other depositors - doubt most most considered the risk and that includes the financial 'wizards' at a number of local councils who were drawn in.0 -
I wasn't tempted by high saving rates in Northern Rock or MSE favourite Icesave but had to protect the deposits of those that were - doesn't seem entirely fair especially as we're probably only talking about a few percent in the event of a bank failure.
This makes it sounds as if the saver is at fault, and Northern Rock has no place in the blame.
Northern Rock knew what they were doing. We all found out in the end. It would have been very difficult for the saver to know that they 1% extra interest they got was due to Northern Rock desperately needing the funds.
It's a bit like saying someone who buys a value version of a sausage should expect to get food poisoning. Or maybe saying anyone who goes into hopsital should expect to come out with MRSA, so don't be tempted to go into hospital.
What we expect in reality is for the products sold to be fit for purpose and for regulation to be followed. Theres a problem when the regulators and the banks themsleves can't understand theyir models. If the banks themselves can't understand their own models, how can we expect joe bloggs the bus driver putting some cash into a savings account to.0 -
Graham_Devon wrote: »This makes it sounds as if the saver is at fault, and Northern Rock has no place in the blame.
Northern Rock knew what they were doing. We all found out in the end. It would have been very difficult for the saver to know that they 1% extra interest they got was due to Northern Rock desperately needing the funds.
It's a bit like saying someone who buys a value version of a sausage should expect to get food poisoning.
What we expect in reality is for the products sold to be fit for purpose.
It's not meant to sound like that. The board and management of Northern Rock were the biggest influence in it's downfall.
Depositors played a part too though because they didn't have to worry about the risks the bank, they were lending to, were taking. I believe in protecting depositors, as they don't have access to all data, but not to a level where there's zero risk. If we've learnt anything it's that returns for zero risk leads to unwelcome outcomes.
The food is a good analogy. If you buy a £1 beef lasagne ready meal you expect beef to be in it but with hindsight you maybe should have questioned how it was possible to deliver this for £1. I did BTW - I've said on here before the horsemeat scandal - if supermarkets drive honest suppliers off the shelf then only the dishonest are left.
Food shoppers now seem to be taking a little more thought about what they buy as a result. Depositors can still afford to be in blissful ignorance.0 -
No matter how bad it may taste most times we have to take the medicine to get better. We've all taken hits so now it's the savers turn. Only question left to ask is, would you rather lose 10% of your HPC vulture fund or 100%? I'm comfortable with Bruce Spanner and the Dr Bubbas of this world losing it all for the greater good of society.0
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ruggedtoast wrote: »The forum hpc.co.uk would literally explode with rage of this happened in the UK
Bruce Banner would blow a gasket!
:rotfl:
he would find some way of talking bu!!$h1t about how he is making more money renting, i have never heard such crap from one person in my life.. and some of idiots on there will listen to himEx HPC fool0 -
National planning Cyprus-style solution for New Zealand
The National Government are pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts, the Green Party said today.
Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.
“Bill English is proposing a Cyprus-style solution for managing bank failure here in New Zealand – a solution that will see small depositors lose some of their savings to fund big bank bailouts,” said Green Party Co-leader Dr Russel Norman.
“The Reserve Bank is in the final stages of implementing a system of managing bank failure called Open Bank Resolution. The scheme will put all bank depositors on the hook for bailing out their bank.
“Depositors will overnight have their savings shaved by the amount needed to keep the bank afloat.
“While the details are still to be finalised, nearly all depositors will see their savings reduced by the same proportions.0 -
I would imagine the savers are withdrawing their funds at this moment.RENTING_IS_DEAD_MONEY wrote: »National planning Cyprus-style solution for New Zealand
The National Government are pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts, the Green Party said today.
Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.
“Bill English is proposing a Cyprus-style solution for managing bank failure here in New Zealand – a solution that will see small depositors lose some of their savings to fund big bank bailouts,” said Green Party Co-leader Dr Russel Norman.
“The Reserve Bank is in the final stages of implementing a system of managing bank failure called Open Bank Resolution. The scheme will put all bank depositors on the hook for bailing out their bank.
“Depositors will overnight have their savings shaved by the amount needed to keep the bank afloat.
“While the details are still to be finalised, nearly all depositors will see their savings reduced by the same proportions.0 -
RENTING_IS_DEAD_MONEY wrote: »No matter how bad it may taste most times we have to take the medicine to get better. We've all taken hits so now it's the savers turn.
I fail to see why savers should take any hit , perhaps you would explain your reasoning.
Is it just that they have got something and you haven't?
That saving will have largely been accrued from taxed income, any interest received is subject to tax an probably sacrificing things in the process.
No doubt the savers have already been hit in the "all taken hits" camp too.
Without savers you wouldn't have the deposits on which affordable lending is pre-dedicated."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Lenders were allowed to become reckless partly by being provided with capital from people who could chase high returns with no risk.
I didn't think the returns were sustainable (particularly in Icesave which I thought was an accident waiting to happen) but still had to insure those who didn't need to care.
Deposits aren't capital they are liabilities. Shareholders provide capital which is an investment risk.
If the lenders hadn't taken undue risks in the first place they wouldn't need to have desperately offered the high price for deposits.
I didn't chase Icesave because at the time it was too good to be true. Not sure most UK based deposit interest rates were so generous.
Like you I too "insured" those losses but that is something you need to do for a stable economy and banking system."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0
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