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Are your savings safe? article discussion

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Are your savings safe? article discussion

edited 30 November -1 at 12:00AM in Savings & Investments
982 replies 163.4K views
Former_MSE_DanFormer_MSE_Dan Former Web Editor
1.6K posts
PPR
edited 30 November -1 at 12:00AM in Savings & Investments
This discussion relates to the fully updated

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Replies

  • I would argue that, regardless of the FSCS, savings with UK based institutions are inherently safer. As Northern Rock showed, HMG cannot afford a UK institution of any size and significance to go under because the political, financial, and economic ramifications are just too awful for it to contemplate. If however a bank in, for example, Iceland, India, or Nigeria were to fail then the situation is much less clear cut for the British investor. It could take a very long time and involve a great deal of time, effort, and stress to recover all money invested up to £35,000.
    I blame Blair
  • 1echidna1echidna PPR
    23.1K posts
    PPR
    ps646566 wrote: »
    I would argue that, regardless of the FSCS, savings with UK based institutions are inherently safer. As Northern Rock showed, HMG cannot afford a UK institution of any size and significance to go under because the political, financial, and economic ramifications are just too awful for it to contemplate. If however a bank in, for example, Iceland, India, or Nigeria were to fail then the situation is much less clear cut for the British investor. It could take a very long time and involve a great deal of time, effort, and stress to recover all money invested up to £35,000.

    I can understand the time (and my situation is that I can afford to wait for the machinations of the FSCS) but why effort or stress? The FCCS surely does not expect the individual investor to assist in recovering monies available in the event of failure by a foreign bank operating under the scheme?
  • bryanbbryanb
    4.9K posts
    Forumite
    Is Hong Kong & Shanghai Banking Corp a UK institution?
    This is an open forum, anyone can post and I just did !
  • rosyrosy
    642 posts
    Forumite
    Can I ask -hoping it's a theoretical question - if a British bank did have to be bailed out by the government and be nationalised, would you retain all of your savings in it or would you lose everything over the protected £35000?
  • Stavros_3Stavros_3
    1.3K posts
    Forumite
    The FSA would gaurantee the first 35k, 'technically' speaking after that its a gonner. BUT. I doubt that this government would allow a UK bank to go under and seeing scenes of thousands of customers queuing outside banks again like we saw with the panic caused over the Northern Rock, I would expect the Chancellor (after changing his crap stained underpants) to re-assure customers that their savings are safe
    Liquidity is when you look at your investment portfolio and **** your pants
  • AegisAegis
    5.5K posts
    Forumite
    Part of the Furniture 5000 Posts
    ✭✭✭✭
    bryanb wrote: »
    Is Hong Kong & Shanghai Banking Corp a UK institution?
    Vaguely, yes ;)

    It's quoted on the UK stock market anyway (among others!)
    I am an Independent Financial Adviser
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
  • OK I understand the rules for the FSCS for banks but does this also work for building societies?
    :confused:
  • AegisAegis
    5.5K posts
    Forumite
    Part of the Furniture 5000 Posts
    ✭✭✭✭
    Yup, same scheme, same terms.
    I am an Independent Financial Adviser
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
  • ExoExo
    175 posts
    Forumite
    ps646566 wrote: »
    I would argue that, regardless of the FSCS, savings with UK based institutions are inherently safer. As Northern Rock showed, HMG cannot afford a UK institution of any size and significance to go under because the political, financial, and economic ramifications are just too awful for it to contemplate. If however a bank in, for example, Iceland, India, or Nigeria were to fail then the situation is much less clear cut for the British investor. It could take a very long time and involve a great deal of time, effort, and stress to recover all money invested up to £35,000.

    I do not follow your logic that investing in British banks is safer than foriegn ones, assuming of course the foriegn banks conform to the FSCS.
    It could be argued that the economies in China and India are far stronger than the UK, so ICICI looks a safer bet in comparison to Alliance and Leicester.

    If a bank did go under, then the saver may have a wait to recover his/her money via the FSCS, regardless of the location of the bank in question.

    From your other posts on this forum, you seem to be averse to investing outside the UK.
    Without competition from foriegn banks, do you think those in the UK would still be competing at the same level of 6% - 6.5% for savers?

    I think the USA and British banks have been quite reckless with their investments/risks. They seem to be meeting target levels in order to sustain their high bonus payouts. Common sense and risk assessment seemed to be well down their check list. They seemed to be totally removed from the real world and their glass bubble has finally broken.
  • rosy wrote: »
    Can I ask -hoping it's a theoretical question - if a British bank did have to be bailed out by the government and be nationalised, would you retain all of your savings in it or would you lose everything over the protected £35000?

    Clearly not theoretical (nor hypothetical).
    Northern Rock was a British bank, bailed out by the government, and then nationalised. Depositors with NR have retained all their savings, and received a bonus to their interest rate for staying put.

    It's when a bank goes completely bust (bankrupt), and isn't taken over lock stock and barrel, that the compensation scheme will kick in.
    Imprudent granting of credit is bound to prove just as ruinous to a bank as to any other merchant.
    (Ludwig von Mises)

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