Credit default swaps: how to spot the riskiest banks

deaglecat

http://www.moneyweek.com/file/41437/credit-default-swaps-how-to-spot-the-riskiest-banks.html

Capital preservation and high investment returns may (for some) turn out to be mutually exclusive. How much attention should we pay to the risk side of the equation or is the "less than £35K strategy in any institution" a safe one ?

... personally, I am now out of ICESAVE... though I accept that they may well turn out to be ok. Also, HBOS / RBS / A&L and all their branded derivatives. Seems like the safest ones to go for are companies like HSBC, Lloyds/TSB and of course NS&I.

planemad

Less than 35k in an institution is surly ok under the protection of the FSCS.

purch

Or you could just sign-up to Moody's or Fitch and get the up to date credit rating for various Banks

I pointed out some time ago the low rating for the parent company of Icesave !!!

Fella

Although everything up to £35K is protected by the FSCS (for those institutions where that applies) it's worth considering that if a bank did go bust there would be a long delay before any payout (could easily be 6 months IMO) & I doubt you'd get any interest during that time. So although it is sold as a 100% guarantee you might actually lose £1K-ish in interest.

Thoughts?

RayWolfe

I think there is interest in adopting the American system which gives almost instant payout.