Nordic banks step in to back Iceland

Protectingearnings

In today's FT online:

"Three Nordic central banks unveiled an unprecedented €1.5bn emergency funding package on Friday to support Iceland’s troubled currency and stabilise its banking system as the tiny north Atlantic nation tries to fend off the effects of the global credit crisis."

How will this affect Kaupthing Edge having the best savings account interest rate?

home_alone

Another first post scare monger.

gary

Oblivion

Hardly scare-mongering Gary. The OP is just relaying what he has read in the FT, and in my view it's a situation that needs watching carefully.

There's no smoke without fire, or in this case ice, and Iceland's economy is looking a little fragile at the moment. At 15.5% it currently has Europe's highest interest rate, and inflation last month was at a 20 year high of 11.8%. Not exactly reassuring for those looking for a safe and stable place to deposit their savings, and I'm currently one of them.

Satscene

looks sensible forward planning to me............

full story.. http://www.ft.com/cms/s/0/aa278d42-23ac-11dd-b214-000077b07658.html?nclick_check=1

Sapphire

Oblivion wrote: »

Hardly scare-mongering Gary. The OP is just relaying what he has read in the FT, and in my view it's a situation that needs watching carefully.

There's no smoke without fire, or in this case ice, and Iceland's economy is looking a little fragile at the moment. At 15.5% it currently has Europe's highest interest rate, and inflation last month was at a 20 year high of 11.8%. Not exactly reassuring for those looking for a safe and stable place to deposit their savings, and I'm currently one of them.

Indeed: I read the report in the FT as well, with some trepidation.

Thank you, Protectearnings, for posting this on the forum - and welcome to the boards.

ManAtHome

Shouldn't we be more worried about UK banks - BoE is likely to be pumping around 100 times that into our system... (including the 50 odd billion for NR).

Oblivion

ManAtHome wrote: »

Shouldn't we be more worried about UK banks - BoE is likely to be pumping around 100 times that into our system... (including the 50 odd billion for NR).

Nah, nothing to worry about. Mervyn's got his John Bull printing kit out. :rolleyes:

Dave.

player

Not being an economist myself, but what worries me about Iceland (having money in an icesave account) is when people compare the situation to here in the UK. Iceland is a country with a population of just 300k, surely our economy is far more resilient to the current economic situation?

ianmr65

player wrote: »

Not being an economist myself, but what worries me about Iceland (having money in an icesave account) is when people compare the situation to here in the UK. Iceland is a country with a population of just 300k, surely our economy is far more resilient to the current economic situation?

You think?

Iceland economy is overheating after years of very strong growth. They have zero budget deficit, a strong economy, geothermal powerstations and alluminium smelters being thrown up at a rate of knots, and three strong and profitable interlinked banks, who have no exposure to sub prime, nor toxic derivatives. with a goverment, central bank, and regulator who all know what they are doing, and coopertae.

The issues with iceland are lack of forrign resevers, high inflation and high intrest rates, and a weak currency. This is partially due to speculation, and partially due to the recent boom. The only real issue with the banks is exposure to the credit markets through their involvement in leveraged european commercial deals. However the banks have been actively seeking and getting forign reserves, in the form of deposits and private bonds and posted strong results, showing them to be well capitalised, and with good ratios.

Compare this with the UK.

We have an economy about to nose dive, vacillation and confusion from the govermenet. regulators who by there own admission, are useless, and a central bank at odds with the goverement, who's attempts to stem inflation are not working. A massive bufget defecit, A housein market that is in freefall, negative equity, and repossesion looming, and a pound that is in freefall against the euro; Rocketing imported inflation we can do nothing about. And a seriously large increase in the money supply over the last two years.
We are a country mortaged up to the eyeballs, living on the never never for thae last ten years, with banks teetering on the brink, cash strapped and not lending, and issuing cash calls right left and centre; and who have still to reveal the true extent of thir sub prime and derivatives losses. All the migrant workers who kept the ecomomy strong by working for peanuts are on their way home. The chinese and indians are not lending us their money to buy their cheap goods anymore, and putting their prices up to boot. The strongest sectors of the economy: finance retail and property are seriously struggling, and we have no manufacturing to speak off.
The best we can expect is a serious recession. The worst is a full scale slump.

On what basis, do you think then, that we have the more resilliant ecomomy?

player

thank you for your insightful, albeit venomous explanation

ianmr65

player wrote: »

thank you for your insightful, albeit venomous explanation

Venemous is a bit strong, i take your point tho... I just get very frustrated with the misgiuded impression that somehow the uk economy is in good shape.