Bank Deposit Protection Scheme

[manshimajin]

Just heard on Irish radio:

 

"What is the difference between a pigeon and a merchant banker?"

 

"A pigeon can still put a deposit on a Ferrari."

[Skeddan]

About 30 years' ago, the majority pf people were paid in cash, very few actually needed a bank account, in fact you were considered 'posh' if you had one.

There was a relatively low cost scheme - heavily used in continental Europe - the Giro system that allowed low cost money transfers , no overdrafts etc that would have satisfied the vast majority of banking needs - in Europe usually offered by the Post Office - it was another one of Thatcher + co's thefts from the British public along with the TSB that had offered low overhead savings for several generations.

There's still a lot to be said for a 'people-owned' Post Office bank account along those lines, especially if it offers banking service meeting vast majority of needs with lower fees, better service and increased competition, and offering best value across range of products. This post-office bank was set up in 2002: Clicky

 

Have a look at what we've got to offer.

 

* Everyday banking

* Savings accounts

* Investments

* Term Deposits

* Online Call accounts

* PIE Term Deposit Fund

* PIE Online Call Fund

* KiwiSaver

* Kiwibank credit cards

* Personal and vehicle loans

* Home Loans

 

* Insurance

* Business Banking

* Migrant Banking

* International Services

* Help while you're travelling

* Innovative banking services

* Tertiary Pack

* Graduate Pack

* Kiwibank and Grey Power

 

(it goes without saying that they also do internet banking and telephone banking as well as having branches at post offices)

[Mutley]

http://www.independent.ie/business/europea...ee-1489400.html

 

Greece now guarantees deposits.

 

I see Darling is still whining that Ireland is playing unfair by guaranteeing deposits as he claims it makes Irish banks more attractive to depositors. Prior to the Irish announcement it had already being announced that UK guarantees would go up to £50k - much more that the €35k that had previously been in place in Ireland. No complaints from Darling about unfair competition then.

[manshimajin]

I see the son of the CEO of the Irish Nationwide Building Society has put his foot in it by soliciting deposits based on the Irish guarantee:

 

Soliciting for funds

 

Naughty boy...doesn't he realise he doesn't need to tell people where to put their money - they will work it out for themselves pretty quickly.

[pongo]

Is competing based upon the security offered by a depositor protection scheme, any more nefarious than tax competitiveness? Both effectively represent state support.

[manshimajin]

Is competing based upon the security offered by a depositor protection scheme, any more nefarious than tax competitiveness? Both effectively represent state support.

No. But the Irish financial institutions promised the Irish Government not to promote the guarantee outside Ireland - no doubt to try an head off the EU Competition Commissioner. And within a few minutes the son of one of the CEOs was off doing it. Of course the media coverage has been enough to reputedly get a big funds inflow.

 

Will be interesting to see what comes out of the Big Four meeting in Brussels today. Is it me or does the EU seem to have moved very slowly on this matter?

Beyond offering reassuring words, the summit is expected to focus on whether governments across the European Union should raise bank deposit protection levels to restore confidence.

 

However, signs of division emerged before the meeting began. Germany repeated its opposition to using taxpayer funds to help ailing banks, and Finland complaining the meeting did not extend to all members of the EU.

 

Sarkozy has invited German Chancellor Angela Merkel, Italian Prime Minister Silvio Berlusconi and Prime Minister Gordon Brown to the talks. All four countries are members of the G8 club of industrialised countries.

[bluemonday]

Many of the banks were already shaky and one was rumoured to be at risk of serious trouble. So what has changed with the guarantee scheme? As I said you can't spray a turd with gold paint and fool everyone into thinking its solid gold. This makes no sense whatsoever. I won't be sticking my money in.

So what is your recommendation for depositors?

• Belgian banks look shaky
  
• German banks look shaky
  
• UK Banks look shaky and government dithering
  
• Manx deposit protection scheme looks shaky
  
• Channel Islands have no guarantee
  
• Irish banks have 100% guarantee but Irish goverment will have to take over the UK to pay it
  
• EU arguing amongst themselves over what to do
  
• US banks disappearing almost daily
  
• Japanese banks look the best capitalised
  

 

Weimar Republic here we come?

 

I'd avoid anything with an Icelandic connection.

They've got problems.

*Cue Kerry Katona jokes*

 

Markets call time on Iceland

[manshimajin]

I'd avoid anything with an Icelandic connection.

They've got problems.

*Cue Kerry Katona jokes*

 

Markets call time on Iceland

Danske Bank called time on Iceland way back in 2006:

 

Poor Old Geysers

 

However, on top of the macro boom, there has been a stunning expansion of debt, leverage and risk-taking that is almost without precedents anywhere in the world. External debt is now nearly 300% of GDP, while short term external debt is just short of 55% of GDP. This is 133% of annual Icelandic export revenues.

 

We look at early warning indicators for financial crises and conclude that Iceland looks worse on almost all measures than Thailand did before its crisis in 1997, and only moderately more healthy than Turkey before its 2001 crisis.

Nationalise Bjork? Offer to stop whaling in return for refinancing?

 

What can be expected of a country whose traditional dishes include cured ram scrota, cured shark, singed sheep heads and black pudding?

[bluemonday]

Front page of the Telegraph Today

http://www.telegraph.co.uk/news/worldnews/...sh-economy.html

[manshimajin]

Ireland and now Germany:

 

By Gernot Heller and Keith Weir Reuters - 44 mins ago

BERLIN/LONDON (Reuters) - Germany said on Sunday it would guarantee more than 500 billion euros (392 billion pounds) in private deposit accounts to protect savers from the worst global financial crisis since the 1930s.

 

Fellow European Union country Ireland last week promised to guarantee all deposits in its banks, prompting some depositors in Britain to move savings to branches of Irish banks and drawing criticism of a fragmented EU response to the crisis. EU Competition Commissioner Neelie Kroes said on Sunday there was a discriminatory element to unlimited guarantees on bank deposits and that she expected Ireland to modify its guarantee plans.

 

However, that does not appear to have deterred Germany, Europe's largest economy. "We say to savers that their deposits are safe," Chancellor Angela Merkel said at a news conference in Berlin. "The federal government is also committed to that."

[manshimajin]

Ireland and now Germany:

 

Add Austria to the list...

 

BERLIN/WASHINGTON (Reuters) - Germany said it would guarantee more than 500 billion euros (392 billion pounds) in private deposit accounts to protect savers from the worst global financial crisis since the 1930s. Austria quickly followed suit.

 

The deposit guarantee announced by Germany, Europe's largest economy, could raise the stakes for EU members to match its terms and restart a debate about Europe's fragmented response to the credit crisis.

 

On Saturday, leaders of Europe's four biggest economies -- Germany, France, Britain and Italy -- vowed to restore financial stability but decided against a coordinated, U.S.-style bailout.

 

Analysts said the broad pledge from European leaders stopped short of the more sweeping action required.

 

"It's like standing on the rails and watching a train coming at you," said Daniel Gros, director of the Centre for European Policy Studies in Brussels.

...or over here a horse tram...

[Mutley]

And still nothing from the Manx Govt...

[Gladys]

But what do you expect them to do Mutley, apart from increase the amount of the deposit protection which seems to be an industry underwritten scheme in any case?

[Alias]

Iceland's been tanking for the last few months hasn't it (inflation and it's currency)? Or is this just Kaupthing etc. under threat of collapse?

[bluemonday]

It's the whole thing with Iceland see http://news.bbc.co.uk/2/hi/business/7651313.stm

 

But what do you expect them to do Mutley, apart from increase the amount of the deposit protection which seems to be an industry underwritten scheme in any case?

 

I raised this issue on here some months ago when they decided not to raise the level at that time.

 

Given recent events, I would have expected them to be proactive in order to demonstate confidence in the system here and competence.

 

They've done neither.

 

I am fully aware of the system differences between here and across but it hardly reassures the small/modest saver who may only get a percentage back and that after some time compared to the far superior cover available elsewhere.