Fears over safety net (Icesave)

nilrem_2

sloughflint wrote: »

That's a bit unfair nilrem. .

Sorry perhaps I worded my comments badly, I was not meaning people here are scaremongering I am talking about the people who write the stuff in newspapers etc.

(Sorry if anyone here thought I meant them, that was not my intention )

Fella

I must admit, I certainly wouldn't dismiss this or anything else as scaremongering, for several reasons.

The first (& biggest) reason is that I don't believe anyone truly has much idea about the credit crunch, how far it extends, who it affects & how it'll all pan out. For that reason alone I think caution is well-advised.

The second reason is NRK. We have already seen a run on a bank for the first time in a zillion years. If the Government hadn't stepped in it is highly likely that anyone with >£35K may have lost out. There's no guarantee the Government will step in next time. If there was, they would simply have upped the £35K guarantee to "unilimited" & then basked in the publice goodwill that would have generated. There's a reason they didn't do that. They didn't even up the limit to £100K as was initially mooted...

The third reason is also NRK. One thing that debacle proved is that it's not necessary for a bank to be in real trouble, only that it is perceived to be so. No-one will ever convince me that more than 1% of those people queuing in the streets had much understanding why they were doing so. Not even .1% in fact. How many people even on this well-educated forum remember the exact detail of what caused it in the first place? Do you really think all those anxious pensioners understood what was going on? No way. IceSave et al may be as secure as Fort Knox but that won't save them if the public decides they're not. If the current vogue for Iceland-bashing gather's momentum that could happen. If I understand correctly, Icesave are permitted to suspend all withdrawals (for a period) if it does happen, which would of course make things worse....

Anyway, I'm not trying to convince anyone not to save with Icesave, but I think these are dangerous (financial...) times & you need to consider all aspects.

Personally I'd be gutted if Icesave were brought to their knees by all this, but that doesn't mean it can't happen.

regards
Fella

CannyJock

Yup, headline grabbing articles for sure, and will appeal to the "can't trust them foreigners" brigade. Strangely in a couple of weeks time the article will be forgotten about and there'll be a whole new headline to chase.

tradetime

The first (& biggest) reason is that I don't believe anyone truly has much idea about the credit crunch, how far it extends, who it affects & how it'll all pan out.

Interestingly, as a slight aside, in a recent interview (last few days) Warren Buffet went on record as saying he did not believe there was any credit crunch, money is easily available for those who want it. Sadly I didn't see the interview so I'm not sure of the context of his comments or the caveats surrounding them, but it is interesting. By and large the survival of banks and financial institutions is probably already sealed, based on the decisions they have already made and only time will tell.

Not the interview, just some comments on it.

tradetime

they would simply have upped the £35K guarantee to "unilimited" & then basked in the publice goodwill that would have generated. There's a reason they didn't do that. They didn't even up the limit to £100K as was initially mooted...

Yes actually I'm surprised the media hasn't run with this, it didn't escape my attention that after all the drama and excitement / fear of banks runs, and much talk by the government all they relly did was protect about £3k more of savers money.

tradetime

For anyone that may be interested info on Landsbanki's (Icesave) 2007 Annual results delivered in London at the end of January.

Presentation of Landsbanki 2007 Annual Financial Results in London 29 January at 11 UK time

Note the banks declaration that it has no exposure to either CDO's or SIV's much of what is plaguing banks in relation to the US sub-prime.

fisher-man_2

tradetime wrote: »

For anyone that may be interested info on Landsbanki's (Icesave) 2007 Annual results delivered in London at the end of January.

Presentation of Landsbanki 2007 Annual Financial Results in London 29 January at 11 UK time

Note the banks declaration that it has no exposure to either CDO's or SIV's much of what is plaguing banks in relation to the US sub-prime.

Well I don't pretend to fully understand all of that but it appears to me they are a solid institution, handy as I am going to put some money with them and now probably a bit more than the guaranteed amount of 70k for a joint account.

There has been a lot of Ice bashing going on lately, the figures in the link above say to me it's mostly unfounded. Does anybody agree/disagree?

tradetime

Personally I would say that amongst their peers, it puts them in a failry healthy position. Does it mean they are bulletproof? No, they are an ongoing operation and are working in quite dangerous market conditions. Amongst the highlights of the statement for me was the clear statement

the bank has no structured credit exposures such as CDOs, SIVs

not the usual "we have minimal, negligable, or comparitively minor exposure." that leaves the door open to a future writedown and "oh things got worse than we calculated, or deteriorated more, or whatever" There's not much ambiguity in "no exposure" So unless they've taken the unusual, career ending, and most likely prosecutable stance of lying to shareholders in an earnings disclosure, then I think it's safe to say that for now they appear to be as solid as anyone else I'd care to have my money with, and more solid than most. In summary I'd say it looks pretty much as good as it gets given the current state of the financial industry. All in my unproffessional opinion of course.