Channel 4 news running a feature on risks of foreign banks

BarryB_2

xiox wrote: »

What I don't understand is why the UK banks can't offer a competitive savings interest rate? Surely it's not that hard to set up a simple website based savings account. If other banks can rake in several billion of savings in a matter of months, couldn't they do the same? They must be able to make some money out of that, even if the interest rate is quite high. What's the rate they get lending money to other banks now?

British Banks do offer competitive savings rates, it's only the big boys who don't, Lloyds, Barclays, Natwest, RBS and so on. ING,Nationwide, EGG, and a heap of others, just as safe, offer 6+% with online accounts and instant access. Have a sniff round and help youself to heaps of interest.

Meltdown_2

ING are Dutch.
Egg are now owned by Citibank (American).

... and Nationwide are a Building Society, not a bank.

ps646566

Meltdown wrote: »

ING are Dutch.
Egg are now owned by Citibank (American).

... and Nationwide are a Building Society, not a bank.

They are indeed. And it's building societies which are offering some of the best rates among UK institutions. I think we all knew that the sorry business of most of the big BS's turning themselves into banks would result in a gravy train for their managements and little if any benefit for the customer. In large part that's how it's turned out.

Stompa

Another article on CDS's:

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

StevieJ

Actually it is probably a good clue to which bank shares you may wish to invest in. Lloyds dividend yield 9%.

ianmr65

A positive article in the FT, on icelandic banks, the link is to the US FT site as they are rather less worried about number of articlers viewed per day.

http://us.ft.com/ftgateway/superpage.ft?news_id=fto031920081808104798

And a link that gives some insight into the CDS market

http://michaelgracie.com/tag/credit_default_swaps/

chegewara

ok i think this discussion needs a real simple example. to borrow from the wholesale market (ie by issuing bonds), icelandic banks today need to pay close to 10% above risk free rates, so above 15-16%. to borrow from a british saver, enough for them to tweak deposit by 0.5%. when asked what they do with the money, icelandic banks say, keep in cash (i.e. lend in the interbank market). that is, until the time comes and they need to pay back the their bonds! so, if the icelandic banks are alright, then you as a saver only give them about 7-8% subsidy. if things are not alright, and you are with kaupthing or heritable, FSA will pay (you will pay too, but then so does your neighbour - you all pay through taxes). if you are with icesave, you are covered by icelandic deposit system. this is worth nothing, so you can end up losing equivalent of 1.5m icelandic krona, or about 11K pounds. now let me ask you all a question. do YOU know if there is no problem with these banks, and WHY would they want your assets so badly if all they do is to keep it in cash?

Satscene

hmm, first post?now i wonder why it`s a `scaremonger` one?

ianmr65

chegewara wrote: »

do YOU know if there is no problem with these banks, and WHY would they want your assets so badly if all they do is to keep it in cash?

Yes there are problems with these banks, there are equivalent problems with every bank in the world at the moment. THERE IS A GLOBAL BANKING, CREDIT, and ECONOMIC CRISIS GOING ON POssibly the biggest since the great depression.

Every bank in the USA, Europe and the UK is struggling at the momement, and all those that are able to accomodate them, are desperate for deposits.
, Coventry BS, Principality BS, B & B and many others, are out there with around 6% instant access. Same as Icesave, and only 0.5% below kaupthing. These UK banks, and BS's are also deperatly struggling to borrow money. This is because the credit markets have dried up!!

The issue is that the icelandic banks are also almost certainly being attacked by speculators, and hedge funds who are shorting their stock, and credit positions, to make proft. Which is why you see lots of press about them.

Now when this happend to HBOS all hell broke loose. And it was nipped in the bud. For all we know HBOS's exposure to the the property market, derivatives and lack of liquidity makes them a more vunerable bank, than the icelandics. The strength and speed of the reaction indicated fragility to me. And after northern rock, all bank rescues here are now done in private. 'To stop panic'. So perhaps shedloads of OUR cash was supplied by the BoE to HBOS, only we the taxpayers are not allowed to know. Only time will tell.

And imagine what would happen if a bank the size of HBOS did go down, what impact do you think that would have on the UK economy? How many billions of pounds in compenstaion would have to be paid, or do you think the goverment could nationalise it? Their liability base is a quater of the UK's GDP.

In any case banks always relly on deposits as part of there business.

NB Kaupthing placed a private bond for £1.1bn at well below the rates you quote. And the banks between them made another billion on their currency position following the recent fall in the krona. They have also financed many UK High street names, and many people in the Uk depend on icelandic companies for there jobs.

My money is on the icelandic banks making it through this period unscathed. I believe that we have only seen the start of the impact of this crisis, on UK institutions.

So please stop posting stuf like this till you know a bit more about what is REALLY going on.

ianmr65

chegewara wrote: »

do YOU know if there is no problem with these banks, and WHY would they want your assets so badly if all they do is to keep it in cash?

Yes there are problems with these banks, there are equivalent problems with every bank in the world at the moment. THERE IS A GLOBAL BANKING, CREDIT, and ECONOMIC CRISIS GOING ON POssibly the biggest since the great depression.

Every bank in the USA, Europe and the UK is struggling at the momement, and all those that are able to accomodate them, are desperate for deposits.

Northern rock, Coventry BS, B & B, are out there with around 6% instant access. Same as Icesave, and only 0.5% below kaupthing. These UK banks, and BS's are also deperatly struggling to borrow money. This is because the credit markets have dried up!!

The issue is that the icelandic banks are also almost certainly being attcked by speculators, and hedge funds who are shorting their stock, and credit positions, to make proft. Which is why you see lots of press about them. Now when this happend to HBOS all hell broke loose. And it was nipped in the bud. For all we know HBOS's exposure to the the property market, derivatives and lack of liquidity makes them a more vunerable bank, than the icelandics. The strngth and speed of the reaction indicated fragility to me. Only time will tell.

In any case banks always relly on deposits as part of there business.

NB Kaupthing placed a private bond for £1.1bn at well below the rates you quote. And the banks between them made another billion on their currency position following the recent fall in the krona.

My money is on the icelandic banks making it through this period unscathed. I believe that we have only seen the start of the impact of this crisis, on UK institutions.