Financial Meltdown (The World)

[Burbage]

British government guarantees 20,000£'s worth of deposits per bank. Something that could prove attractive over the next few days. Could be money to be made by buying the pound right now.

[baloo]

There are bound to be opportunities everywhere that will seem so obvious in hindsight, but this market is unchartered waters for everyone and I don't feel like be Christopher Columbus at the moment.

In saying that, with the absolute hammering the big banks have taken over the last few months, some of them are looking very cheap.

[Morrolan]

There are bound to be opportunities everywhere that will seem so obvious in hindsight, but this market is unchartered waters for everyone and I don't feel like be Christopher Columbus at the moment.

In saying that, with the absolute hammering the big banks have taken over the last few months, some of them are looking very cheap.

it's not over yet, baloo. this market will need at least a week of no new bad news to settle down.

funny, just yesterday i told a client that this will get worse before it gets better. though right now, i wish i wasn't right.

only one 'safe' fundamental area at the moment: commodity producers in the food and energy sectors, but even there there will be a lot of volatility.

[baloo]

yeah, don't disagree M. This is going to be fun. I'm just preparing a watch list at the moment.

[Fat Bob]

British government guarantees 20,000£'s worth of deposits per bank. Something that could prove attractive over the next few days. Could be money to be made by buying the pound right now.

You're way behind the times. It's now £35k in cash plus various amounts on investments, mortgages, insurrance etc. Check out the Compensation Limits

[Kooky]

So should I be splitting up my money? It's not much but it's over GBP35k. It's in a 180 day notice account.

[Burbage]

There you go. 35K.

Wouldn't do any harm to split. Then you can be absolutely sure yu won't lose any of it. But then you might start a run...

[Fat Bob]

Also depends which bank it's in. It seems so far that ALL deposits have been covered in both Northern Rock and Bradford and Bingley, so you are UNLIKELY to lose the excess.

But to be on the safe side, I would suggest you cut down the amount in each account to no more than £30k, as this allows interest to build up over 1-2 years without going over the £35k limit.

Watch out which bank you put money into, as if the bank is owned by the same people (e.g. HSBC and First Direct) and you have £35k in each, you only get £35k back, not £70k.

You do know there are some good accounts with instant access? Like the ICICI Bank? Gives you greater than 6% gross. Others available too.

[Kooky]

Yeah, I've been very lazy Bob - stuck it in there and forgot about it, but now it's getting to be something worth keeping an eye on so I really should.

We have plans to see an Aussie accountant as we have to be careful with our global tax liabilities (having just about gotten last year's return out of the way), but I guess they might be very busy right now.

[Kooky]

Thought this might be useful to some of us non-banking experts:

http://www.thisismoney.co.uk/saving-and ... _page_id=7

edit: not really sure where to put that hyphen

[Morrolan]

We have plans to see an Aussie accountant as we have to be careful with our global tax liabilities (having just about gotten last year's return out of the way), but I guess they might be very busy right now.

there appears to be no such thing as double tax prevention treaties in Australia, which can make it very expensive to keep money off-shore (if the Oz tax man knows about it). you can move funds into Australia tax free within a certain period after arriving in the country.

[Fat Bob]

Who is going to tell the Aussie tax man about what money they have off-shore? How is the aussie taxman going to find out?

[baloo]

Who is going to tell the Aussie tax man about what money they have off-shore? How is the aussie taxman going to find out?

No one. They'll only find out when you try to bring it into the country. Banks have a ruling that when a deposit of more then AUD$10k comes in from overseas, it needs to be reported to whatever authority wants to know. Oh, and multiple $9,999 deposits will also trigger alarm bells.

[Kooky]

Yup, thanks, M - am aware of that and IIRC the limit is six months. We had just about decided not to bring it over, but at the moment our alternative plan is on hold. Ah, decisions, decisions. The accountant in me hates risk.

[Morrolan]

Who is going to tell the Aussie tax man about what money they have off-shore? How is the aussie taxman going to find out?

No one. They'll only find out when you try to bring it into the country. Banks have a ruling that when a deposit of more then AUD$10k comes in from overseas, it needs to be reported to whatever authority wants to know. Oh, and multiple $9,999 deposits will also trigger alarm bells.

they can find out though when acting on suspicion of tax evasion, see, for instance, the whole Paul Hogan affair.

of course, as long as there are people around who evade multiple millions the odd hundred thousand deposit will simply be too small for them to bother...

[baloo]

AORD closed 4.3% down. Nikkei 4.12% down.

Europes starting to wake up.

[Lichtgestalt]

kooky, FB, it's 35K GBP for each individual in the UK for all British Banks, so if you have 30K at HSBC and 30K at TSB and both go bust then you still get only 35K back (if the UK isn't bankrupt then).

[Addadude]

Or you could move all your savings to Ireland and have them 100% guaranteed...

Government to guarantee all deposits in Irish banks
DAVID LABANYI
The Government has placed an unlimited two-year guarantee on all deposits and certain debt in six Irish banks in a move designed to “safeguard the Irish financial system”.

The move effectively removes the deposit protection limit of €100,000 introduced by the Government just two weeks ago and comes after yesterday's record losses for Irish financial stocks with Anglo Irish Bank shares falling 46 per cent. Banking shares fell 26 per cent on the Iseq yesterday.

The measure has had an immediate impact with Irish banking shares rising sharply in the first hour of trading today. At 8.40am bank shares were up between 10 and 28 per cent, with Irish Life and Permanent the highest gainer. The Dublin market was just over 3 per cent higher.

The Minister for Finance Brian Lenihan explained the move was designed to “secure the stability of our banking system” as it was becoming increasingly difficult for banks to secure funds on world markets.

“If funds are not secured by the Irish banks it would be a very, very serious matter for economic life in this country. I think every, business, every worker knows how short those funds have been in the past year. If they dry up entirely that is very, very serious for Ireland,” he told RTE radio.

The Minister added the Government has “drawn up contingency plans for every scenario” or difficultly that Irish banks may face, but declined to elaborate.

He denied the measure was a “bailout” of Irish banks, saying the facility was subject to a charge or a levy. The level of that charge will be set by the Central Bank, he said.

The Government said the guarantee extends to Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society.

It will also extend to subsidiaries of these banks, following consultation with the Central Bank and the Financial Regulator.

It does not extend to deposits in National Irish Bank, ACC, Rabobank or Ulster Bank which are subsidiaries of large international banks.

All deposits are covered by the guarantee including retail, commercial, institutional and interbank deposits, as are bonds, senior debt and dated subordinated debt.

It also covers all money borrowed by Irish banks from other financial institutions. The guarantee takes effect immediately and will expire at midnight on September 28th, 2010.

“The decision has been taken by Government to remove any uncertainty on the part of counterparties and customers of the six credit institutions,” the statement from the Department of Finance said in a statement.

It said the unlimited guarantee was designed to “remedy a serious disturbance in the economy caused by the recent turmoil in the international financial markets”.

On September 20th, the week that US investment bank Lehman Brothers collapsed, the Government raised the State guarantee limit on deposits to €100,000 from €20,000.

© 2008 irishtimes.com

[canuck]

places to keep your money and places not, time to shift overseas I be thinking

deposit insurance

did not expect oz to be nil?

[Kooky]

kooky, FB, it's 35K GBP for each individual in the UK for all British Banks, so if you have 30K at HSBC and 30K at TSB and both go bust then you still get only 35K back (if the UK isn't bankrupt then).

Can you give me the source of that info, Lichty?

[Fat Bob]

kooky, FB, it's 35K GBP for each individual in the UK for all British Banks, so if you have 30K at HSBC and 30K at TSB and both go bust then you still get only 35K back (if the UK isn't bankrupt then).

you sure? In my link above it says "Compensation limits are per person (per firm and type of claim)."

And following over into Kooky's article, it says it's best to spread the money across multiple banks (and checking that the banks are each signatories no matter what umbrella they may be under).

[Lichtgestalt]

kooky, FB, it's 35K GBP for each individual in the UK for all British Banks, so if you have 30K at HSBC and 30K at TSB and both go bust then you still get only 35K back (if the UK isn't bankrupt then).

Can you give me the source of that info, Lichty?

From the FSA
http://www.fsa.gov.uk/pages/About/What/ ... f/DGSD.pdf

[Kooky]

Is this the bit you are referring to?

The maximum level of compensation for deposits exceeds these requirements and is £35,000 per person for claims against firms declared in default from 1 October 2007 (100% of the first £35,000).

If so, I read that differently.

[Lichtgestalt]

I read a bit more and not 100% sure anymore but this
http://www.fscs.org.uk/consumer/key_fac ... on_limits/

confirms it. Or calll +44 20 7066 1000

[Burbage]

So the finance experts used by the Torygraph advising people to spread their funds were wrong? Perhaps you should get their finance editor on the blower and let him know.