Are your savings safe? article discussion

TheBigQuestion_2

I've got that question in with my bank regarding offset mortgages, and they are still investigating. So far they have all said is they don’t know!!!!!!

I was offered an fscs leaflet, if that would help !!!!!

Another bank sent a college a copy of the banking code, when that question was asked by them.!!!!

Why is this hard question to Answer?

Additionally I have also spoken to the FSA, who said don’t know speak to the to the FSCS

chris1

ianmr65 wrote: »

The passport scheme works like this :
Banks fails.
If the other country does not pay up. The FSA will cover the whole amount.
So you have double cover for the first £15k with passsport schemes that you don't have with FSA alone.

I'm afraid this is not the case - if the home scheme does not pay up, the FSCS will not cover it, they only cover any extra part you have, e.g. from £15K to £35K.

Patr100

This is what Martin says:

UK Top up. Any amount not covered is topped up to £35,000 by the UK scheme. E.g. if the overseas scheme covered £20,000 the UK scheme would cover the remaining £15,000.
This does mean in the unlikely event if a European bank covered by the passport system went bust, you would have to try and claim some compensation from a foreign country

mycar37

ianmr65 wrote: »

Landsbanki are rated by Fitch and Moodys, not S&P.

Just read that Fitch has issued a Ratings Watch Negative against ICESAVE (Landsbanki) and a couple of other banks. They now have BBB ratings instead of the A rating they held last week. Should we be concerned?:money:

mycar37

ianmr65 wrote: »

Landsbanki are rated by Fitch and Moodys, not S&P.

Forgot to atach this to my previous reply.
2008.04.01, 13:57

Fitch puts Kaupthing, Glitnir and Landsbanki on rating watch negative




Fitch Ratings has today placed Kaupthing Bank's, Glitnir Banki's, and Landsbanki Islands' Long- and Short-term Issuer Default ratings (IDRs), senior and subordinated debt ratings and Individual ratings on Rating Watch Negative (RWN). The Support ratings of '2' and Support Rating Floors of 'BBB' have been affirmed.

While Fitch believes that the three banks' liquidity is currently sufficient, diminishing confidence in the sector has increased the risk of unanticipated calls on liquidity while severely restricting funding options. Moreover, the recent sharp depreciation of the ISK and the heightened risk of a 'hard landing' for the Icelandic economy are likely to adversely impact asset quality and performance.

Nevertheless, Fitch notes that the business fundamentals of the three banks currently remain sound. Liquidity appears comfortable and the banks are currently able to operate without recourse to the capital markets for some months to come.

Further information:
Gudni Adalsteinsson - Chief Treasurer, + 354 444-6126
J!nas Sigurgeirsson - Chief Communications Officer, +354 444-6112

chris1

Patr100 wrote: »

E.g. if the overseas scheme covered £20,000 the UK scheme would cover the remaining £15,000.

The point being, that if the foreign country did not pay up, the FSCS would not cover the first £20K.

silvercar

My building society has the following ratings:

Moodys A2/P1
Fitch A/F1

Is that good, bad or in between?

The problem with asking the building society is that, if they went bust, where would I go if they had falsely reassured me? I can't sue them if they've already gone bust.

jamesd

mycar37, unanticipated calls on liquidity includes things like consumers getting worried and taking out their money so you should be worried that you might take out your money. That and similar by other banks is the major threat to many banks at the moment.

Negative credit watch effectively means that they think it'll be more likely to decrease in credit rating than increase.

You shouldn't be greatly concerned if you're within the compensation limit because Iceland is expected to be able to pay the guarantee amounts.

ps2659

I have £120.000 that I wish to put in a bank with no risk is northern rock the best place as the goverment has guaranteed savings up to 2 million.

jamesd

There is no bank that has no risk. Even the most stable has liquidity risk if the guarantees have to be used and you might not be able to get the money for a while. You might also choose a fixed rate or variable rate and hence speculate on whether interest rates will go down or up or decide to lock your money in for a fixed term.

If you're concerned about the need to get to some of the money quickly your best option is to use several different banks and building societies, so that a problem that affects one is less likely to affect your ability to get all of your money.

Guarantees are good but there's still no substitute for diversification of investment risk.