Financial Services Compensation Scheme
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Hermanmunster wrote: »Money will evaporate into bad debt in the aforementioned scenario and we will initially have deflation and they probably will print money to counteract deflation but if they had to print money in a deflationary depression they may just let the retail public subjects of a bail in scheme to replace the Financial services compensation scheme.0
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Johnnyboy11 wrote: »Look to the 2012-13 Cypriot Financial Crisis for your answer, and in particular the 'one-off' bank deposit levy. I have no confidence whatsoever in the Central Banks or FSCS.
Putting your money under the mattress because of what happened in Cyprus is like refusing to let your wife leave the house because of what they do to unaccompanied women in Saudi Arabia or rural India.
No depositors in the unprecedentedly bad 2007-08 financial crisis lost money.
Even people who had exceeded the FSCS compensation limits didn't lose a penny.
Even people who put their money in Icelandic banks outside the UK regulatory system didn't lose a penny.
If you still don't have confidence in the depositor compensation system then it's clear there are no facts and nothing they can ever do which will ever change that.0 -
In this hypothetical "deflationary depression" of which you speak, the spending power of money is actually increasing, which causes consumers to defer spending, which in turn is bad for the economy. Causing them to lose some of their savings would make this situation worse, whereas printing money to compensate them would make the situation better. It would be a no-brainer.
I hope your right . No Brainer ,mm . Well going on the way the Brexit has been dealt with by the government no brains does spring to mind
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I was slightly too young to remember 2008 crash. However have obviously caught the news constantly over the last few years.
Did people actual lose money in this crash?
I'm not talking about property devaluing or or share prices falling. I mean savers with 100k in a bank, did they lose their cash?
Was the FSCS in place before the crash?0 -
Read post #130
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Read post #13
Dayyyyyym! he replied to my question an hour before I asked it. How do i give that guy a double thanks!
Expanding on that, why did people in Icelandic banks not lose a penny? Surely our FSCS doesnt cover "foreign" banks? I assume Icelands central bank covered it? Or maybe the FSCS isn't just a British institutional tool? maybe more international than i realised?0 -
Expanding on that, why did people in Icelandic banks not lose a penny? Surely our FSCS doesnt cover "foreign" banks? I assume Icelands central bank covered it? Or maybe the FSCS isn't just a British institutional tool? maybe more international than i realised?
Having learned that lesson and been bailed out myself, I don't save money with institutions that don't have a UK banking licence any more.0 -
a vital difference between the UK and cyprus is that cyprus is in the eurozone.
in the UK, the government controls the bank of england, and the bank of england has the magic money tree. so if the government wants to come up with any amount of money, whether to back up the FSCS, or to bail out depositors, or the bail out whole banks, there is no doubt that they can do that. the only question is whether they'd choose to do so. and there is every reason for them to at least ensure that the FSCS guarantees are honoured (and probably to go a lot further than that).
cyprus uses the euro, so the only relevant magic money tree is the one run by the ECB, which obviously won't do whatever the cypriot government (one of the smallest of the 19 countries in the eurozone) tells it to. so they didn't have the option of bailing out all depositors. as it turned out, they did manage to honour the guarantees under their equivalent of the FSCS, though there were doubts at the time about whether that would happen; but not to go further and protect all depositors.0 -
short_butt_sweet wrote: »a vital difference between the UK and cyprus is that cyprus is in the eurozone.
in the UK, the government controls the bank of england, and the bank of england has the magic money tree. so if the government wants to come up with any amount of money, whether to back up the FSCS, or to bail out depositors, or the bail out whole banks, there is no doubt that they can do that. the only question is whether they'd choose to do so. and there is every reason for them to at least ensure that the FSCS guarantees are honoured (and probably to go a lot further than that).
cyprus uses the euro, so the only relevant magic money tree is the one run by the ECB, which obviously won't do whatever the cypriot government (one of the smallest of the 19 countries in the eurozone) tells it to. so they didn't have the option of bailing out all depositors. as it turned out, they did manage to honour the guarantees under their equivalent of the FSCS, though there were doubts at the time about whether that would happen; but not to go further and protect all depositors.
Yes, if you are lucky you might get your nominal pound back, but what will it be worth? Pre-2008 GBP/USD was 2.0. Today, not so much...0 -
Johnnyboy11 wrote: »Yes, if you are lucky you might get your nominal pound back, but what will it be worth? Pre-2008 GBP/USD was 2.0. Today, not so much...0
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