Channel 4 news running a feature on risks of foreign banks

ps646566

I know the that FSA are pretty useless, but are they really so thick with the UK banks that they would publish this just to scaremonger people out of depositing abroad ?

I take it as slightly cryptic shot across the bows. When Northern Rock got in the mire, HMG almost disappeared up its own backside in its zeal to protect the reputation of the UK financial sector, and to make sure that no depositor lost out.

But if the same happened to a foreign bank then it is not HMG's problem. The FSA statement makes this very clear, and it is probably acting as the Treasury's stooge in this respect. I think the FSA is saying that if you lose out through investing in a foreign bank then you are on your own. Yes, there are UK and foreign guarantee schemes, but who wants the stress and hassle of trying to get their money bank from those, especially from the foreign ones ? And no doubt where there are unclear lines of demarcation (which appears to be the case with most if not all of them), then you can bet that the FSA and whatever other body is involved would be duck-shoving it backwards and forwards for yonks, like two insurance companies arguing over buildings and contents. It could takes months and months to get the money, and all that time it would not be earning any interest at all. It might never all be recovered.

You can get UK deals almost as good as from the likes of Kaupthing and ICICI if you shop around. And for the relatively small interest advantage involved I don't think it's worth the risk, especially now that the FSA has fired the warning shot. I am in the process of withdrawing the relatively small amounts that we have placed with non-UK organisations and placing it where HMG and the FSA have the same vested interest in protecting our interests as they do with Northern Rock.

bristolleedsfan

ps646566 wrote: »

I am in the process of withdrawing the relatively small amounts that we have placed with non-UK organisations and placing it where HMG and the FSA have the same vested interest in protecting our interests as they do with Northern Rock.

Thats what the powers that be are hoping will happen.

RayWolfe

I know that the CIA arranged the assassination of President Kennedy and that 52% of Americans have had a relationship with extraterrestrials, but what would the British Government, the FSA or Channel Four News gain from "planting" this story?

Griffboy

Well, I hope they're OK because I've just put a couple more quid in there now.

ps646566

bristolleedsfan wrote: »

Thats what the powers that be are hoping will happen.

Maybe so, but as I said earlier, are the FSA really that disreputable as to be in cahoots with UK banks on this ? I'm not going to take any risks for the sake of a few quid in interest, just on a matter of principle and to give the UK banks a bit of a bloody nose. The financial world is a very different place from when I opened those foreign accounts. If the foreign banks are that bothered, then they should publicly refute what the FSA has said and openly offer details of the compensation schemes that encompass them. I don't see that happening so far, and am a believer in no smoke without fire.

ianmr65

But if the same happened to a foreign bank then it is not HMG's problem. The FSA statement makes this very clear, and it is probably acting as the Treasury's stooge in this respect. I think the FSA is saying that if you lose out through investing in a foreign bank then you are on your own. Yes, there are UK and foreign guarantee schemes, but who wants the stress and hassle of trying to get their money bank from those, especially from the foreign ones ?

The FSA is not saying that at all. I have been all over the FSA website looking for a statement on foreign banks and can't find anything resembling your statement. In fact the only statement i know about was the one made to channel4. Which i can't find published anywhere. (do you have a link to it?)
In fact if you look on the FSA's consumer advice savings acccount finder Icesave, and Kaupthing appear near the top, as recommended accounts!!

Lets be clear very few banks these days are 'UK' owned. HSBC - stands for Hong Kong and Shanghai Bank. Abbey is wholly owned by Grupo Santander, a spanish based concern. Lloyds will have major foreign investors. Many foreign banks have major UK investments. Kaupthing has a major stake in Whittards of Chelsea!!

Many banks with foriegn sounding names eg Deutsch bank do the banking for many UK based companies - Nearly all the major banks IN THE WORLD are run by Ivy-Leauge Americans. Including the 'british' ones.

Banking these days is extremely international. If say HSBC, went down, then the whole planet would have to pull together to rescue it.
If Barclay's went down, bearing in mind that they have a market cap of £60,000,000,000: which is about 5% of the UK's GDP, operates in 60 countries, and has a market cap that makes it the 80th richest 'country' in the world, in it's own right. It is highly unlikely that the UK goverment would have the means nor the expertise to do anything about it, without a great deal of help from the FED, and the ECB, and the rest of the world's other banks.

The main reason that Northern Rock was saved by the treasury, and the FSA was that it almost uniquely amongst UK banks, it pretty much only operates in the UK, it's fairly small, it was the first UK bank run for 70 years, and had a very regional branch based bias, and it's management were useless. The reality is that the sight of people queueing to withdraw their money probably did more to rescue it, than anything else.

The FSA's compensation scheme applies to any bank that is licenced to operate in the UK.
The icelandic banks operate in about 15 countries. See my post above for the compenstaion arrangements, and the real reasons behind the programme and the FSA statement to channel 4.

Stompa

ianmr65 wrote: »

In fact if you look on the FSA's consumer advice savings acccount finder Icesave, and Kaupthing appear near the top, as recommended accounts!!

Unless I'm looking at a different table, it says under the "You should know" heading on the right-hand side: "These products are not FSA recommendations".

ps646566

I first came across the issue not on Channel 4, but in the Daily Telegraph, which published an article the other day quoting the FSA, and naming a specific senior executive.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/04/nbanks104.xml

To say therefore that this is all down to PR and spin from UK banks makes a serious allegation against the FSA. I have no time for the organisation, which like most other regulators is toothless, non-proactive, and possibly too cosy-cosy with the industry. However for them to stick their neck out publicly in this way, and to issue something to the press which has no foundation and in which they do not believe does beggar belief.

As I said before, if there is no foundation in this, and if the compensation available from foreign banks, should one fail, would in fact result in a full, speedy, and trouble-free reimbursement to UK account holders, then those banks need to do their own PR and convince people like me to put money back with them. Until and unless they do that, I'll play safe.

[Deleted User]

Fear mongering rubbish, landsbanki/icesave is a international bank, it runs hargreaves lansdowns stock broking service. Has many rich clients, offers mortgages on jersey, runs heritable bank the lists goes on.

The news story is a ploy that wants people to leave the banks to get torrid interest on savings at their local bank.

[Deleted User]

Yant1 wrote: »

Fear mongering rubbish, landsbanki/icesave is a international bank, it runs hargreaves lansdowns stock broking service. Has many rich clients, offers mortgages on jersey, runs heritable bank the lists goes on.

The news story is a ploy that wants people to leave the banks to get torrid interest on savings at their local bank.

Absolutely correct - Well said.:money: