Financial Services Compensation Scheme

Johnnyboy11

coyrls wrote: »

I won't be worth less than a nominal pound that you hadn't lost.

Only if you ignored the sound of the printing presses rattling back into action...

eskbanker

Hermanmunster wrote: »

If we experience a really BIG BUST....

Loving the thought that this thread may disappoint some searchers who mistakenly find their way here!

short_butt_sweet

Johnnyboy11 wrote: »

Only if you ignored the sound of the printing presses rattling back into action...

ok. so now that the idea that you should worry about the FSCS guarantee not being honoured has been thoroughly debunked, your fallback theory is that QE causes high inflation.

this was a popular theory when QE started. you could call it the quantity theory of inflation: the more cash there is, the less it's worth. that sounds plausible. the only problem is that it's completely untrue, as has been demonstrated by the low inflation we've had over the years since QE.

high inflation is mostly caused by people trying to buy more goods and services than the economy has the capacity to produce. so we've had low inflation due to falling wages and the government choosing to cut many areas of spending (austerity).

another cause of inflation is a falling exchange rate (making imports more expensive). we have had a bit of that recently. the pound hasn't gone down due to QE (after all, the dollar, euro and yen had their own QE). it's more to do with the balance of trade (or lack of balance).

YKNA

Was not aware of that thanks for the information on non UK banks not being covered by the scheme.

AlanAlanAlan

How does the FCS know how much an individual has invested in any given bank, especially as many are now on-line

John_G_Jones

antrobus wrote: »

Given the recent experience of 2007-08 it would be more accurate to state that retail banks will now be allowed to fail without them impacting on the investment banks.

After all, neither the Northern Rock nor the B&B were known for their investment banking acumen.

Yes, people forget that RBS lost £50,000,000,000 on normal lending. The investment bank did not do brilliantly, but was not the part that brought the bank to its knees.

John_G_Jones

AlanAlanAlan wrote: »

How does the FCS know how much an individual has invested in any given bank, especially as many are now on-line

Is that a serious question?

The banks write people’s balances down on post-it notes. There are many, so they have a team of trained monkeys who sit ready to hold it up to a camera and have it transcribed by off-duty Russian trolls when you log in to your online banking. There’s a deal with the trolls and monkeys that they’d let the FSCW see the actual post-it’s if a crash comes.

This process is why it takes a little while to see your balances on the web.

greenglide

In the case of Icesave the actual running of the accounts was outsourced to Newcastle Building Society.


It would therefore be simple enough to give the details to FSCS at the time of default.


In the case of an small, chaotic, dodgy organisation which defaulted it would ultimately be up to the individual savers / investors to make individual claims on FSCS.


Just because the Icesave and it's friends debacle was handled well doesn't mean that any future ones would.