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wonderpup

My Bank Sent Me A Letter Today To Tell Me How Safe My Money Is

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Soooooo- I get this nice letter from Nat West today reminding me of the protection in place for my money- it was apparently deemed necessary to remind me of this despite the fact that this same information is plastered all over every branch I visit.

However when I subject this letter to what I will pretentiously call 'Lexicological analysis' (Ok-so I read the letter) I discovered that it displays some rather interesting qualities-interesting that is to someone of the tin foil hat persuasion.

Firstly no where in the letter can I find the word 'Guarantee'- secondly the letter informs me that in the 'unlikely' event that anything bad should happen to my bank ('cough'-2008-'cough') eligible customers can claim up to 85 thousand pounds.

So am I reading too much into the following?

1) The fact that Nat West felt they needed to reinforce the existence of the FSCS 'compensation' scheme by sending me a letter.

2) That the word Guarantee has seemingly vanished from the text of the FSCS web site- though I am sure that this word was known to them in the past and did feature on their website. Google will return the FSCS website if you type 'Bank deposit guarantee' into it's search box- but the website itself prefers the softer term 'compensation'.

3) That being able to 'make a claim' for the return of my money seems to introduce an element of 'fuzzy logic' that the former concept of a 'Guarantee' excluded.?

See- to my mind making a claim for something is not the same as having a guarantee that I will get that something- for example were I -as a result of bad karma in a previous existence- to return to earth as a sales person for a company in the PPI mis-selling compensation business I would not be allowed to guarantee to a potential client that I could get them any compensation- I could say that I would put in a claim on their behalf- but should I offer any kind of guarantee of success for that claim I would probably be in breach of the law in some way.

So when Nat West assures me that in the 'unlikely' event that the debt ridden carcass they represent should collapse that I will be in a position to 'claim compensation' for my lost saving- are they offering me any more assurance than that PPI compensation salesman?

It seems to me that if the FSCS cannot guarantee that I will get my money back then their assurances are not quite as reassuring as I would have liked them to be.

So- the ravings of a tin foil hat wearing paranoid- or the early detection that something rather odd is going on with Nat West?

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Not just Nat West, they keep playing the FSCS advert over and over on the radio as well, assuring us that our money is protected. Yep, time to panic!!

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Hmmm looking at a few different banks online I have not found one that use`s 'Guarantee' it`s all protect`s up to or you can claim up to, the cynical side of me say`s there is no guarantee

Did they ever use Guarantee ? or was it just the FSCS that used it

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Did they ever use Guarantee ? or was it just the FSCS that used it

The fact that Google's search engine offers it as predictive search term strongly implies that the term 'Deposit Guarantee' was in fairly widespread use. It's maybe possible that people just came up with the term on their own- but I doubt it- I am certain that until recently the word 'guarantee' was used by the FSCS (or maybe the then FSA?) and the banks in reference to deposits under the protected amount.

So either we are looking at some fairly orwellian care being taken over the terms used or google is wrong and no one ever used this term in the past- I tend to trust google and assume that deposit 'guarantees' were being offered until somebody decided that this might prove problematic and opted for the term 'compensation' instead.

Edited by wonderpup

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The FSCS will pay out in a week. The BOE will lend it the money. Trust me or put on a tin foil hat.

Does the fact that bail in legislation across the entire EU has recently been enacted change this certainty? Or the IMF calling for a one off wealth tax?

If- as you say- my money is guaranteed why does the word guarantee appear to have been airbrushed from the lexicon? Surely the best way to reassure the public that their deposits are guaranteed is to say so, rather than talk about making a claim for 'compensation'?

The fact that the annual levy for 2014 is £313million is downright comical- that's not enough to pay for city bonus's let alone make good the depositors of a large bank.

You assume that the PTB would have no option but to print up the money in the event of a major crash and that's probably true- unless they chose to take the opportunity of a crisis to enact a system wide bail in- at which point having the word 'guarantee' embedded in the reassurances they had previously offered might prove a bit awkward.

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I had a look at the website they're promoting in the radio adverts here

If I didn't already have a preconception about the scheme it wouldn't be obvious what the scheme does from the wording they use.

For example,

The FSCS offers free and automatic protection for your savings, up to £85,000

If anything happens to your bank, building society or credit union, the FSCS automatically refunds savings up to £85,000 within 7 days. You won't have to do anything.

If the scheme does what I think it does they should have said

The FSCS offers free and automatic protection for all of your savings, up to £85,000

If anything happens to your bank, building society or credit union, the FSCS automatically refunds all savings up to £85,000 within 7 days. You won't have to do anything.

Am I being paranoid :huh:

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I agree the language seems pretty "tricky". I suspect there is some legal reason for wording it the way they have - maybe to avoid some legal liability? i.e. if a company offers a "money back guarantee", surely they're legally obliged to honour the guarantee in certain conditions. Perhaps the FSCS don't want the legal liabilities of such a guarantee. Just a guess.

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I agree the language seems pretty "tricky". I suspect there is some legal reason for wording it the way they have - maybe to avoid some legal liability? i.e. if a company offers a "money back guarantee", surely they're legally obliged to honour the guarantee in certain conditions. Perhaps the FSCS don't want the legal liabilities of such a guarantee. Just a guess

What puzzles me is how the term 'deposit Guarantee ' ever became so ubiquitous in the first place- if it has never actually been official policy to offer such a guarantee. We all seem to share the idea that such a guarantee was on offer-but no mention of such a guarantee is currently to be found on the official FSCS website.

Do we all have the same screen memory thing going on here- or has the term 'guarantee' been given the Kremlin treatment and airbrushed out of the official versions of what is on offer?

I'm sure I remember the term deposit guarantee being part of the official language in the past- but perhaps it never was?

Edited by wonderpup

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What puzzles me is how the term 'deposit Guarantee ' ever became so ubiquitous in the first place- if it has never actually been official policy to offer such a guarantee. We all seem to share the idea that such a guarantee was on offer-but no mention of such a guarantee is currently to be found on the official FSCS website.

Do we all have the same screen memory thing going on here- or has the term 'guarantee' been given the Kremlin treatment and airbrushed out of the official versions of what is on offer?

I'm sure I remember the term deposit guarantee being part of the official language in the past- but perhaps it never was?

Do you have any paper bank statements from a few years ago? I remember Barclays statements from a few years ago had the FSCS thing on it, but I can't be bothered to fish them out right now.

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I am not entirely convinced the UK would have a bail-in, but vicious money printing and a 50% devaluation. Followed by a continuation of the charade of house price inflation, fast loans and bankers bonuses would kick off again.

Europe on the other hand, I wouldn't be so sure - for example it's a certainty that the Irish government do not have enough 'cash' to make good the compensation scheme here so in effect the EBC would have to print then credit the accounts and I cannot see Germany liking that when an Irish/Spanish/French bank fails due to playing fast and loose.

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http://www.fscs.org.uk/news/2010/december/new-deposit-guarantee-limit-to-3y3itxmm/

New deposit guarantee limit to be £85,000

17th December 2010

The Financial Services Authority (FSA) has confirmed that the new deposit compensation limit will increase from £50,000 to £85,000 per person, per authorised firm, from 31 December 2010.

Click here for the FSA press release.

This is on the FSCS site at the minute.

Interesting that the wording being used is changing.

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Soooooo- I get this nice letter from Nat West today reminding me of the protection in place for my money- it was apparently deemed necessary to remind me of this despite the fact that this same information is plastered all over every branch I visit.

It would seem they have to advise you of the 'guarantee' twice yearly.

http://www.fscs.org.uk/news/2014/january/had-a-letter-from-your-bank-or-pa9i4kb1g/index.html

But yes, should anyone have to claim I'm sure the devil will be in the detail.

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This is on the FSCS site at the minute.

Interesting that the wording being used is changing.

Interesting- I didn't spot that in their news section.

So they were using the term 'Guarantee' in their 2010 announcement- but have shifted to the term 'compensation' more recently. This does suggest to me that they are attempting to create a degree of wiggle room. Why that is I have no idea.

I have decided to move my money out of Nat West as a direct result of them writing to tell me how safe it is :lol: - probably not the intended outcome.

But I am mindful that there is an election coming up and Osborne seems to be capable of doing just about anything to win- I don't want to be a victim of some harebrained scheme to sell off Nat West with some kind of depositor funded debt reduction gimmick thrown in to attract buyers.

Sounds unlikely I know- but so did the idea of a Tory government using taxpayer money to fund people's mortgage deposits.

The more general observation here is that all this focus on increasing public awareness of a scheme that is supposedly automatic and at least-until recently- 'guaranteed' strongly suggests a desire to engineer a scenario in which any future bail in can be defended on the grounds of 'well- we did make you aware of the limits- so if you lost out it's your own fault'.

After all- the bank knows how much of my money they hold- so why waste the time and resources to tell 98% of the population that the money they thought was 100% secure is in fact 100% secure?

Edited by wonderpup

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I had a look at the website they're promoting in the radio adverts here

If I didn't already have a preconception about the scheme it wouldn't be obvious what the scheme does from the wording they use.

For example,

If the scheme does what I think it does they should have said

Am I being paranoid :huh:

Yes, you are.

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Interesting- I didn't spot that in their news section.

So they were using the term 'Guarantee' in their 2010 announcement- but have shifted to the term 'compensation' more recently. This does suggest to me that they are attempting to create a degree of wiggle room. Why that is I have no idea.

I have decided to move my money out of Nat West as a direct result of them writing to tell me how safe it is :lol: - probably not the intended outcome.

But I am mindful that there is an election coming up and Osborne seems to be capable of doing just about anything to win- I don't want to be a victim of some harebrained scheme to sell off Nat West with some kind of depositor funded debt reduction gimmick thrown in to attract buyers.

Sounds unlikely I know- but so did the idea of a Tory government using taxpayer money to fund people's mortgage deposits.

The more general observation here is that all this focus on increasing public awareness of a scheme that is supposedly automatic and at least-until recently- 'guaranteed' strongly suggests a desire to engineer a scenario in which any future bail in can be defended on the grounds of 'well- we did make you aware of the limits- so if you lost out it's your own fault'.

After all- the bank knows how much of my money they hold- so why waste the time and resources to tell 98% of the population that the money they thought was 100% secure is in fact 100% secure?

I expect that the regulator has told them to tell you about the FSCS. awareness is key to avoiding a bank run again.

Compensation is a more accurate term than a guarantee. When a bank goes under you lose all your savings. You then get compensated for all the money up to the limit. It does not guarantee your savings - they are lost.

This is all a storm in a tin hat.

Not paying out when the government can print the money would be political suicide.

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I'm going to double-post this from the Bank IRS thread:

They'll go for everything, it's true that cash will be the easiest target but it's difficult to think what might be safest.

The IMF are giving blueprints out...(bail-in)

EDIT: wrong one! -- now corrected -- http://www.imf.org/external/pubs/ft/fm/2013/02/pdf/fms2.pdf

The sharp deterioration of the public finances in many countries has revived interest in a “capital levy”— a one-off tax on private wealth—as an exceptional measure to restore debt sustainability.

The appeal is that such a tax, if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair).

For my money you actually have to get some of it out of the system - buy some silver, gold, antiques, bitcoins, whatever floats your boat.

No bank is safe, imo, and besides it all, they're bloody evil! (e.g. RBS and its Global Restructuring Group [GRG])..

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I'm going to double-post this from the Bank IRS thread:

The IMF are giving blueprints out...(bail-in)

EDIT: wrong one! -- now corrected -- http://www.imf.org/e...02/pdf/fms2.pdf

For my money you actually have to get some of it out of the system - buy some silver, gold, antiques, bitcoins, whatever floats your boat.

No bank is safe, imo, and besides it all, they're bloody evil! (e.g. RBS and its Global Restructuring Group [GRG])..

A bail-in mechanism for both banks and building socities is contained within the Financial Serivces Reform Bill 2013 currently making its way through the House of Lords. Deposits covered by FSCS are explicitly excluded from the scope of the power to make bail-in provision.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/245755/HoL_Policy_Brief_-_Bail-In.pdf

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A bail-in mechanism for both banks and building socities is contained within the Financial Serivces Reform Bill 2013 currently making its way through the House of Lords. Deposits covered by FSCS are explicitly excluded from the scope of the power to make bail-in provision.

https://www.gov.uk/g...f_-_Bail-In.pdf

So if the sheeple don`t have much money and are safe, and the smarter money knows to keep within limits and/or get some out of the system, who`s money exactly would be involved in a "bail in"?

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Part of the marketing is also likely to be some job creation scheme for the marketing department/associates of the banks and the FSCS etc. The banks have the free (taxpayers and savers) money so maybe they're spreading some of it around to their marketing pals.

Better than increasing peoples' savings rates eh.

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I expect that the regulator has told them to tell you about the FSCS. awareness is key to avoiding a bank run again.

Compensation is a more accurate term than a guarantee. When a bank goes under you lose all your savings. You then get compensated for all the money up to the limit. It does not guarantee your savings - they are lost.

This is all a storm in a tin hat.

Not paying out when the government can print the money would be political suicide.

It's true-what the FSCS are now saying is that I can make a claim for compensation- which is different from having a guarantee- so the wording is more accurate- that's why it worries me.

If, as you suggest- the over riding consideration is to prevent a bank run then a guarantee is what you need to be offering- not the chance to put in a claim for compensation.

I agree that it's hard to imagine a scenario where the FSCS limit would be overidden, but then it was hard to imagine a scenario in which the banks would be bailed out by the government- until it happened.

My feeling is that the change of lexicon is contingent- in place for the sake of completeness and the remote possibility that the FSCS limit may have to be sacrificed for the greater good. It will be marginally less difficult to justify a compensation scheme that falls short than a guarantee that fails.

Edited by wonderpup

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A bail-in mechanism for both banks and building socities is contained within the Financial Serivces Reform Bill 2013 currently making its way through the House of Lords. Deposits covered by FSCS are explicitly excluded from the scope of the power to make bail-in provision.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/245755/HoL_Policy_Brief_-_Bail-In.pdf

Have to say, in the event of a large institution going Tango Uniform, I would not like to be waiting to see when the FSCS is gonna give me my money back. It could take ages, and in that time, who knows what might happen?

In the USA the FDIC has $33Bn to cover $11,000 Bn (i.e. $11 Tr) of deposits.

http://www.bankregdata.com/allDP.asp

http://www.bloomberg.com/news/2013-04-11/fdic-deposit-insurance-fund-hits-33-billion-after-2009-deficit.html

I imagine we'd be printing straight away to cover anything like a big failure. Oh, but wait.. bail-in anyone?

Edited by weaker

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It would be quite funny if everybody started holding their money in cash. And then all paper money gets band and it's the new plastic notes. I wonder if that's why they are putting Sir Winston Churchill on them to encourage stoicism amongst the masses.

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