Is Iceland headed for meltdown?

tradetime

What you have to bear in mind is that when a bank goes bust no-one is going to get their money tomorrow, next week, or even next month. The bank would go into receivership and they would then assess all the banks liabilities, determining the ranking of who gets paid frm anything salvagable. Amongst the lists of liabilities would be your account, any compensation I imagine would be paid against this record.
I would personally imagine (I have no idea for sure) that any sort of payout / compensation would be 12 months+ in the offing.

Steve_xx

tradetime wrote: »

What you have to bear in mind is that when a bank goes bust no-one is going to get their money tomorrow, next week, or even next month. The bank would go into receivership and they would then assess all the banks liabilities, determining the ranking of who gets paid frm anything salvagable. Amongst the lists of liabilities would be your account, any compensation I imagine would be paid against this record.
I would personally imagine (I have no idea for sure) that any sort of payout / compensation would be 12 months+ in the offing.

Yes it could take quite a while. I think that the FSCS would only rebate once all the creditors were sorted out; as it might be the case that there are some funds left in the bank, after asset stripping etc, to pay the depositors some portion of their monies back. The FSCS would at that point make the difference upto the 35k mark. For sure, you would not get monies from the banks assets, whatever they may be, plus another 35k from the FSCS.

masonic

pem2 wrote: »

What has worried me a little in thinking about this hypothetical scenario of the unlikely event of a bank going bust and then having to call on the untried/tested guarantee, is in proving you have the money there in the first place. Many of us have online only accounts/paperless options etc and this crossed my mind last September as I was trying to get on to Northern Rock's website to reduce my funds down to 35k, but fortunately I did and everybody else did who wanted to. Now if a bank went completely down, no website etc. difficult administrators, could you all prove you had the funds there and would they except a previous online statement as proof?

If a bank becomes insolvent, the details of your account(s) should be passed to the FSCS, so there shouldn't be any need to prove your account balance to them. While the scheme is untested with regards to deposit accounts with Banks/Building societies, it's worth taking note that many other types of claim have been processed. For example, already this year 2 credit unions have been declared insolvent and their customers are in the process of being reimbursed for their losses.

http://www.fscs.org.uk/files/documents/pdfs/okcqzxotsborkls.pdf

pem2

masonic wrote: »

If a bank becomes insolvent, the details of your account(s) should be passed to the FSCS, so there shouldn't be any need to prove your account balance to them. While the scheme is untested with regards to deposit accounts with Banks/Building societies, it's worth taking note that many other types of claim have been processed. For example, already this year 2 credit unions have been declared insolvent and their customers are in the process of being reimbursed for their losses.

http://www.fscs.org.uk/files/documents/pdfs/okcqzxotsborkls.pdf

Yes in a perfect world our details would automatically go to the FSCS but as we know banks & building societies do make mistakes and members here from the legal profession would probably agree that where possible details should be kept in writing and even then it's not foolproof.

masonic

pem2 wrote: »

Yes in a perfect world our details would automatically go to the FSCS but as we know banks & building societies do make mistakes and members here from the legal profession would probably agree that where possible details should be kept in writing and even then it's not foolproof.

That's certainly true. People should be downloading / printing online statements routinely as mistakes can happen at any time.

[Deleted User]

BTW BCCI was closed down for corruption/fraud/laundering not being insolvent.