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talexuser

Anthorn wrote: »

Ok I won, you lost.

:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl: a new definition of cloud cuckoo land?

Plus

To get back to the argument in hand, do we know:

1. Whether any EU banks covered by the passport scheme have failed?
2. Which of those did not pay up under the passport scheme?

We've had examples of Iceland - which is not an EU member and not covered by the passport scheme. What's the track record of actual passporting? I'm not aware of any failures in the UK, but elsewhere in the EU? Presumably we've had some experience with failures to know how it works in practice? (Taking into account that every situation is different, black swans, unknown unknowns, etc, etc).

masonic

Plus wrote: »

To get back to the argument in hand, do we know:

1. Whether any EU banks covered by the passport scheme have failed?
2. Which of those did not pay up under the passport scheme?

We've had examples of Iceland - which is not an EU member and not covered by the passport scheme. What's the track record of actual passporting? I'm not aware of any failures in the UK, but elsewhere in the EU? Presumably we've had some experience with failures to know how it works in practice? (Taking into account that every situation is different, black swans, unknown unknowns, etc, etc).

It's actually the EEA passport scheme and Iceland is a part of the EEA. Icesave was covered by the passport scheme, which failed (in as much as Iceland refused to pay up). Thankfully, the UK Government took action to see UK savers repaid. I'm not aware of any examples where the passport scheme was triggered, other than that.

colsten

masonic wrote: »

I'm not aware of any examples where the passport scheme was triggered, other than that.

I am not aware either of anyone reporting issues with failed EU banks on MSE but I reckon there must have been UK residents who were caught up in the banking troubles in Malta and Cyprus. Goodness only knows what will happen in Greece, and to the non-greek banks that are exposed to the tune of billions of Euros.

A slightly different case I have heard about is that of the british expat couple who lost out big time in Portugal.

To think there would be anything easier about EU banks than it was with the icelandic ones is just plain foolish IMO.

Plus

So we have instances of where the passport scheme has not paid out because the country who backed it has gone bust (Iceland, Cyprus). I think any savers should understand guarantees are only as good as the body who makes them.

The Banco Espirito Santo case sounds like one of mis-selling. We'd have to look into the exact details (made muddier by the language barrier), but I imagine something similar if Tesco were to go bust, and people who bought Tesco retail bonds thought they were saving in Tesco bank not investing in Tesco group.

In the Keydata case, people who were sold investments with 'guaranteed capital protection' (that wasn't) were refunded by the FSCS, but I don't know what would happen if people bought retail bonds and then experienced a failure: the marketing of those retail bonds to unsophisticated savers is pretty shoddy IMHO, but they do say they are risk-based assets.

What would be interesting data points is whether Espirito Santo or other banks' customers in large EU countries were affected - France is not Cyprus or Iceland, though politics is always a risk (even in the UK).

masonic

Plus wrote: »

So we have instances of where the passport scheme has not paid out because the country who backed it has gone bust (Iceland, Cyprus). I think any savers should understand guarantees are only as good as the body who makes them.

That's not quite what happened. In the Icesave case, for example, the Icelandic government guaranteed 100% of the deposits of Icelandic citizens, but refused to compensate UK or Dutch citizens. So it is not only the financial health of the body making the guarantee, but also potential discrimination on the basis of nationality, that need to be taken as risks of the passport scheme.

Quantifying the extra risk being taken is a difficult thing to do, but given that in general FSCS protected accounts pay rates as high or higher than passport scheme protected accounts, there isn't really any need to do so - stick with accounts under the scheme that has been tested numerous times and has a 100% track record of paying out.

colsten

Plus wrote: »

I think any savers should understand guarantees are only as good as the body who makes them.

savers should also understand that FSCS and passport schemes are industry schemes. There is no government scheme anywhere in the world that guarantees savers any money.

Plus wrote: »

France is not Cyprus or Iceland, though politics is always a risk (even in the UK).

France is a great example of a country / society which discriminates against non-French citizens. For example, Disneyland Paris charges british and german visitors more than french ones, for exactly the same package; employers give (or even must give, not sure about the very latest legislation) french citizens preference; France wanted to implement a property tax for non-French EU citizens and only backed down after being threatened with court cases. You can find plenty more such examples.

I maintain that to think there would be anything easier about EU banks than it was with the icelandic ones is just plain foolish. Particularly, as masonic pointed out, FSCS-protected rates are presently in general higher than those offered by passport schemes. I can't see that this will change anytime soon.