More Icelandic bank gossip on Working Lunch

nilrem_2

More discussions about saving with Icelandic banks on Today's working lunch programme, most of it designed to scare savers IMHO!

Nothing new was said it was mostly just the issues of the compensation sceme, but I imagine that a few 1000 more savers will now be moving their cash out of Iceland!


FWIW you can watch todays working lunch after 3:30pm today here http://news.bbc.co.uk/1/hi/programmes/working_lunch/7324088.stm

ianmr65

nilrem wrote: »

, but I imagine that a few 1000 more savers will now be moving their cash out of Iceland!


http://news.bbc.co.uk/1/hi/programmes/working_lunch/7324088.stm

I'm not sure this actually matters. The key issue for the icelandic banks is the hedge fund speculators, and dealers who are shorting them. And the success of the investigation, into that, and legal action against bear stearns and the 4 named hedge funds. Bloomberg covered all this is detail yesterday, the FT the day before.
The BBC up to the miniute as ever.

The Icelandic goverment has re-iterated support whch has caused the Krona to rise. Are prorbaly getting ready to pump a massive investment in.
"fighting fire with fire"

The dual moves of a multi goverment legal, and regulatory challenge in every relevant jusidiction, at the same time as a boost to the banks shares, and liquidity. Should make the hedgers have to close their short positions, and scare away the insider trade "unscrupulous" rumour mongers and wrong doers.

I think this will all have blown over and been done and dusted within 4-6 weeks

NB Iceland is throwing up loads of hydro-thermal energy power stations. This will make them eventually a key energy player.

Financial_Novice_2

Nilrem, That wasn't quite my take on what they said. They more or less dismissed the idea that the next big crash would hit the Icelandic banks (although I think they could have been a bit stronger in the way they said it). The also confirmed that savings with Kaupthing Edge are fully protected up to the £35k max and this compensation would be recovered from the FSA/uk Govt.
They mentioned some other banks that operate a 2 tier system whereby you need to apply to the country of origin of the bank for the first £15k and the remaining £20 would be covered by the FSA.
There is a 3rd level of compensation that effectively only covers the saver according to the rules of the country to which the bank belongs (eg the £15k say) - the remaining £20k is not safe.

As well as KE, they mentioned a few other banks however I'm afraid I didn't take this in as I was only concerrned with KE. Perhaps some other more observant listener will post about this.

ianmr65

Financial_Novice wrote: »

They mentioned some other banks that operate a 2 tier system whereby you need to apply to the country of origin of the bank for the first £15k and the remaining £20 would be covered by the FSA.
.

Thanks for that. FN.

I understand that actually for ICEsave who are Passport FSA (2 tier), you would apply to the fsa, as normal, who would apply to the icelandic compensation authority, on your behalf for the first £15k, and top up the balance. This would be to avoid double bubble payments.

NB if you want my opinion the next big bank crisis will be in central europe. The ECB seem to be in a state of denial, about all this. Typical germans!!

nilrem_2

Financial_Novice wrote: »

Nilrem, That wasn't quite my take on what they said. Perhaps some other more observant listener will post about this.

TBH I thought I was being observant, it did not alarm me and I have considerable savings in Icesave but I am sure that some 'edgy' savers might have been put off saving with Icelandic banks by the comments from the viewer who appeared and commented that in the case of a failure he would not live long enough to get his cash back from Iceland!

As I say I was not trying to alarm people but I felt people might be interested in what they said.

Financial_Novice_2

I understand that actually for ICEsave who are Passport FSA (2 tier), you would apply to the fsa, as normal, who would apply to the icelandic compensation authority, on your behalf for the first £15k, and top up the balance. This would be to avoid double bubble payments.

If correct, that's great however it's not the impression working lunch gave. They speculated that you would need to apply to the Icelandic govt and that this could tale and unspecified lengthy time. In this respect then they may be seen as scaremongouring.

Financial_Novice_2

nilrem wrote: »

TBH I thought I was being observant, it did not alarm me and I have considerable savings in Icesave but I am sure that some 'edgy' savers might have been put off saving with Icelandic banks by the comments from the viewer who appeared and commented that in the case of a failure he would not live long enough to get his cash back from Iceland!

As I say I was not trying to alarm people but I felt people might be interested in what they said.

I agree, what the viewer said was a bit alarmist and ties in with my comment about the insinuation made by working lunch about the time scale for recovering your savings

ianmr65

Financial_Novice wrote: »

If correct, that's great however it's not the impression working lunch gave. They speculated that you would need to apply to the Icelandic govt and that this could tale and unspecified lengthy time. In this respect then they may be seen as scaremongouring.

Well i tend to go by what the FSA, and the bank concerned actually say will happen, rather than someone on the BBC, who probably has not done his reaserch.

Meltdown_2

If I recall correctly, the latest consultation paper (the one that has a closing date of 23 April) is suggesting that compensation could be paid out in a week :j rather than the 6 months previously allowed. (Edit: yep - section 1.49 & Ch.5)

And the banks, through the BBA, seem to be accepting that a higher figure than £35K might be more appropriate in future (though not wanting to move very much - for obvious self-interest reasons).

In response to this point by Financial Novice :

There is a 3rd level of compensation that effectively only covers the saver according to the rules of the country to which the bank belongs (eg the £15k say) - the remaining £20k is not safe.

one shouldn't automatically assume that all these overseas compensation schemes are worse than the UK one.

I haven't seen the programme as yet ... I prefer to eat my lunch whilst NOT watching TV ...

Financial_Novice_2

nilrem wrote: »

TBH I thought I was being observant, it did not alarm me and I have considerable savings in Icesave but I am sure that some 'edgy' savers might have been put off saving with Icelandic banks by the comments from the viewer who appeared and commented that in the case of a failure he would not live long enough to get his cash back from Iceland!

As I say I was not trying to alarm people but I felt people might be interested in what they said.

nilrem, I wasn't insinuation that you weren't observant. I was being self critical.

ianmr65

Financial_Novice wrote: »

nilrem, I wasn't insinuation that you weren't observant. I was being self critical.

Thats how i read it too.