Comments on: The Financial Crisis Goes Global – European Banks Need a Bail-Out Too

By: SoulSurfer

SoulSurfer — Fri, 10 Oct 2008 11:50:46 +0000

Keep a close watch on the Financial Services Compensation Scheme website. At the moment they say: "We are working closely with all concerned on the practical arrangements to get people their money back as quickly as possible. We hope to be in a position to say more about the arrangements by the close of business on Friday, and we will publish updates on our website."

By: Mr C N Roberts

Mr C N Roberts — Fri, 10 Oct 2008 06:12:06 +0000

I have approx £10,000 invested in three year bonds with each of Icesave and Kaupthing-Edge banks.How will the collapse of these banks affect me. Will I be able to reclaim my money? Also what would you advise me to do.

By: SoulSurfer

SoulSurfer — Wed, 08 Oct 2008 11:47:23 +0000

When Gordon Brown and Alistair Darling got to the House of Commons this morning Mr. Brown finally announced some co-ordinated global action on the financial crisis. The UK, US and EU (and a number of other countries too) simultaneously cut interest rates by 1/2 a percent. Japan offered their moral support, but their interest rates are only 1/2 a percent in total at the moment! Mr. Darling has just talked to the Commons about the Icelandic banks. Heritable's deposits will be transferred to the Dutch bank ING. This applies also to Kaupthing Edge, the UK internet arm of Iceland's biggest bank. He reiterated he will do "whatever it takes" to protect savers. I assume he doesn't think that he'll need to borrow from Russia in order to keep his promise. The FTSE 100 has erased this morning's losses, and is now in positive territory to the tune of 1/2 a percent.

By: Bob

Bob — Wed, 08 Oct 2008 11:20:19 +0000

Newcastle Building Soc. have operational links with Landmineski – should we be drawing our money out there too????

By: SoulSurfer

SoulSurfer — Wed, 08 Oct 2008 08:20:54 +0000

UK Chancellor Alistair Darling was on BBC television this morning announcing details of the British Bail-Out. Regarding Icesave he also said: "The Icelandic government, believe it or not, have told me yesterday they have no intention of honouring their obligations here." Maybe Mr. Haarde isn't such a decent chap after all? Maybe he has no choice in the matter because his country is bankrupt? According to Mr. Darling: "Because this is a branch of a foreign bank the first call would be on the Icelandic compensation scheme which, as far as I can see, hasn't got any money in it." Maybe that's why Geir Haarde is trying to borrow €4 billion from Russia? According to Mr. Haarde: “We have not received the kind of support that we were requesting from our friends, so in a situation like that one has to look for new friends.” Mr. Darling evidently doesn't intend to rely on Russian cash to protect British savers, so he announced a special bail-out for Icesave customers: "I have decided in these exceptional circumstances that we will stand behind those depositors so they get their money back." No mention of Heritable Bank so far, however, and no mention of lost interest either. The markets were obviously impressed by Mr. Darling's bail-out plans. The FTSE 100 is currently down 5.8% already this morning.

By: P. SMITH

P. SMITH — Tue, 07 Oct 2008 17:57:01 +0000

Today Landsbanki, Iceland's second biggest bank, has been nationalised. Investors cannot wihdraw their money from Icesave, the British internet bank owned by Landsbanki. Landsbanski will almost certainly go into administation. There has been absolutely no media information about Heritable Bank, another British bank owned by Landsbanski, however, when I contacted them, they also stated they were not taking deposits or allowing withdrawals.
Geir Haarde, the Prime Minister of Iceland stated, "It is very unlikely British investors will lose money." Wrong Mr.Haarde! On the contrary, it is more than likely. Unlikely things seem to be happening everyday lately. Mr. Haarde looks like a decent chap, but he's a politician. Even if in the end, we are correctly compensated in accordance with the rules,(by no means certain due to the economic mess that is now Iceland) his statement is likely to be quite wrong. Under European banking regulations, (which include Iceland)interest on one's deposit stops on the day the bank goes into administration. The bank has up to three months to compensate depositors. If one has say £50,000 on deposit, in three months you will have lost up to £800 in interest! Is Geir Haarde going to replace this money? – of course not!

By: SoulSurfer

SoulSurfer — Tue, 30 Sep 2008 14:23:28 +0000

Failure to learn from history is one of my hobby horses. Don't get me started! However for more background on Rob's point the Federal Deposit Insurance Corporation helpfully provides a chrono-bibliography of the Savings and Loan crisis of the late 1980s on their website. Note the final sentence - "Additional bank crime legislation the next year (i.e., the Crime Control Act of 1990) mandates a study by the National Commission on Financial Institution Reform, Recovery and Enforcement to uncover the causes of the S&L crisis, and come up with recommendations to prevent future debacles." I guess their recommendations didn't quite go far enough.

By: rob harbison

rob harbison — Tue, 30 Sep 2008 00:01:02 +0000

No listens and no learns from history. This is the same thing done during the S and L crisis. The govt. kills banks with good assets but over regulated and gives the assets to big Northeastern Banks (who have been involvent for years due to their bad overseas loans, which no one want to talk about) and those banks then get huge govt. funds in guarantees which they use loan to consumers for ten times cost. Remember, historically banks lent for 1 to 1.5 percent over cost of funds. Find that now. Try 5% or greater. Bank of America used horribly cheap Fed money to buy Countrywide. No wonder they weren't worried.