Bank run

vmaxnick

Be gentle.

3 banks in the US have now failed failed and Credit Suisse are in serious trouble. I have some money split between an ISA and just sitting in the Building society waiting for me to decide what to do with it. My gut is telling me, buy land, even if it's just a stable and some fields, just get the money into property. Mervyn King once said (Paraphrasing) 'Don't start a run on the bank, but get your money out when it starts.' What's thoughts have you, financial guru's?

jimexbox

As long as your deposit is FSCS protected, what's to worry about? 

InvesterJones

Land/property is a famously illiquid asset - definitely not the kind of thing to do if wanting a defensive portfolio that you can access in the near term.
If not interested in near term then you don't have to worry, FSCS will return deposits and if you were looking long term only you probably wouldn't be in cash.

vmaxnick

To be fair, I'm watching the situation in the US and Biden is assuring all deposits, even those over $250k, which is fine when you hold the reserve currency and can theoretically print more money, but the £ is not the reserve currency and if this is the banking appocalypse 'experts' are predicting, will the FSCS underwriting be safe? I'm sure this is a really stupid thing to stress over but the older I get, the more concerned I am that the !!!!!! ARE out to get me (Rushing to construct tin foil hat)

metrobus

I hope there is a run on a UK bank .
Just to teach the greedy bar stewards a lesson.

They are acting as a cartel at the moment with pathetic rates of interest and taking the people who finance them for mugs.
Didn’t one recently declare a £57 billion profit, whilst paying a pittance to savers?

InvesterJones

vmaxnick said:

 will the FSCS underwriting be safe?

Yes it will.

vmaxnick

metrobus said:

I hope there is a run on a UK bank .
Just to teach the greedy bar stewards a lesson.

Didn't work that way in 2008 though did it? As I recall, the banks used taxpayer bailouts to pay their bonuses first. (Rewards for failure?)

wmb194

How old are you? The world didn't end in 2008 so why do you think it will this time? The banks that have failed all seem to have pretty niche problems e.g., odd risk management, over exposure to particular types of companies, a particular blind spot in US banking regulations for certain kinds and size of banks that apparently doesn't apply in Europe. 

The banking regulations, captital requirements, stress testing and so on are far stricter than they were in 2008 and there haven't been stories this time around as there were then about the use of insane derivatives like CDO squared and off-balance sheet vehicles used to avoid capital requirements.

It usually makes sense not to panic.

dunstonh

3 banks in the US have now failed failed and Credit Suisse are in serious trouble.

Credit Suisse have been in trouble for a long time.  That isnt news.   The banks in the US were specialist.  

 My gut is telling me, buy land, even if it's just a stable and some fields, 

Land is expensive at the moment (I am a landowner). It will probably fall in price as it tends to cycle in a wavy line in real terms.  The vast majority of land doesn't add value in real terms.

 'Don't start a run on the bank, but get your money out when it starts.' What's thoughts have you, financial guru's?

I am not sure why you are linking current events to retail banking.  The actions taken after 2008 split retail banking arms away from the riskier banking activities.

, but the £ is not the reserve currency and if this is the banking appocalypse 'experts' are predicting,

clearly not experts.

will the FSCS underwriting be safe?

It is covered by the lender of last resort.

Albermarle

vmaxnick said:

Be gentle.

3 banks in the US have now failed failed and Credit Suisse are in serious trouble. I have some money split between an ISA and just sitting in the Building society waiting for me to decide what to do with it. My gut is telling me, buy land, even if it's just a stable and some fields, just get the money into property. Mervyn King once said (Paraphrasing) 'Don't start a run on the bank, but get your money out when it starts.' What's thoughts have you, financial guru's?

By the time you have gone through the often long process of buying land, this 'crisis' will be long past .

vmaxnick

wmb194 said:

How old are you? The world didn't end in 2008 so why do you think it will this time? The banks that have failed all seem to have pretty niche problems e.g., odd risk management, over exposure to particular types of companies, a particular blind spot in US banking regulations for certain kinds and size of banks that apparently doesn't apply in Europe. 

Credit Suisse is a European bank. According to finacial news, Sunak is in communication with Biden over the bank failures and forecasts so allthough probably not a cause for panic, cautious consideration might be wise.

I was around in 2008,1998, 88, 78 and 68 so I suppose I should know better, but 2008 didn't come hot on the heels of a world pandemic where Governments borrowed outrageously, printed money prolifically and resided over the closest we've come to seeing the embodyment of Thucydides Trap with Eastern countries seriously considering creating their own reserve currency.

But, I suppose if the Western world and all it's institutions do fall, I suppose someone will come and boot me off my field with stables.

I'll get a dog.