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grey shark

Icelandic Banks

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Iceland, which has boomed on the back of exponential growth in its banking sector, is now suffering in the clutches of the credit crunch.

One commentator said: "Iceland is being treated like one big toxic hedge fund. It's a tiny country whose corporate and banking sectors have leveraged up to get better returns and punch way above their weight. That leverage is now magnifying their losses. The story doesn't make sense any more. Nobody wants anything to do with it."

More here ...............

http://www.telegraph.co.uk/money/main.jhtm.../cckrona123.xml

Beware , the norse men :ph34r::ph34r:

Edited by grey shark

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More here ...............

http://www.telegraph.co.uk/money/main.jhtm.../cckrona123.xml

Beware , the norse men :ph34r::ph34r:

Yes, these reports are a little worrying; especially having a couple of accounts with Icesave (one of which is fixed for another few months). :(

Their internet service has been good to date, when compared to A&L for example; however in light of the current scare stories,

Does anyone know if the compensation amounts extend to the interest earned to date. i.e. lets say it goes tits up half way through this year would we still be entitled to the original deposit (under 35K) as well as the 6 months interest (yet unpaid) already earned on the fix rate?

On their normal esavings account the amount would have had the interest already applied on a monthly basis so would already be part of the total balance to date.

The other major consideration would be how long it would take to sort out the paperwork and actually get the money back again, presumeably incurring further loss of interest in the meantime. Is this reclaimable?

Anyone else looked into the details of this or have any other info on the Icelandic economic situation?

Short of that, the terms and conditions of the fixed rate state "no withdrawel within the period". Does that mean no withdrawel full stop or no withdrawel without total loss of interest?

Any help info appreciated

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I've got a few more months left too on an Icesave 6-monther. I'm not sweating that one much to be honest, but then it's not exactly a huge amount of money. And the interest rate rocks.

As for Icesave's instant access account - 6.05% is pretty sad in this environment and as northern rock's tracker online has been relatively generously reduced just to 6.25% I don't see much point in staying loyal to Icesave. I've set up an instruction to move most of my instant access funds out as of tomorrow. Hope we don't all start a run. B)

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MJS,

I too am in your postion.

From the cursory reading I've done so far, it would appear that Iceland's own compensation system picks up the first 15k, topped up by our own compensation system up to the first £35k.

What is not clear is if the country becomes bankrupt and cannot pay the first £15k, will our compensation system pick up the full £35k?

What I asked IceSave a month ago about moving money from the bond the reply was a flat no. However, if you were looking to buy a house they would 'consider' it with loss of 3 - 4 months interest as well as a solicitors letter.

So there you go.

The bet seems to be on Iceland's own financial health if IceSave go to the wall.

OK thanks for the information.

I chose Icesave in the first place as I liked the fact I didn't have to keep moving the money about. With Bradford and Bingley, Abbey, A&L etc you have to keep reopening accounts once the teaser rates end which is irritating; Although probably not as irritating as trying to get the money back through some sort of compensation scheme for several months or longer, should the Icelandic economy run into trouble.

Does anyone know what proportion of their economy is in the financial sector?

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Some of my money is coming out of Icesave. I saw this article on the main forum and it made up my mind:

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Clearly the Icelandic government are not completely in control if they are having emergency meetings - well, no more in control than the Fed is. Some of my money is in an Icesave 6-month bond so that will be staying put for a few more months at least.

The list of high-paying instant access accounts reads like a list of all those banks that have warnings against them - A&L, B&B etc. I'm very reluctant to go with ICICI or the First Bank of Nigeria. The consensus seems to be that Northern Rock's Tracker Online seems best (how times change).

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I've just taken out a slice too and left the minimum amount in. The fallback of £35k guarantee doesn't give me any desire to actually go through that process. I'm sure you'll lose interest and it will be a lot of hassle.

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Just Logged on to Icesave to withdraw some money from the regular savings account although I will be reluctantly leaving the bulk of it in their one year bond due to the hassle of getting it out with a solicitors letter etc

People must be withdrawing funds because I didn't notice this statement, pasted below, on their home page last week!

This statement is probably as reassuring as an estate agent saying the market is picking up!

I hope they are sincere! :unsure:

Our Financial Strength

Being young, and one of the most high profile savings providers in the UK, we are asked our fair share of questions about who we are and whether we provide a safe home for UK savers.

Being a provider that prides itself on being transparent we thought we’d give you the full picture about our parent bank, Landsbanki, so you can make your mind up for yourself. Landsbanki is:

A well-established bank

We were founded in 1886 and have been operating in the UK since 2000, where we employ more than 500 people.

An international financial services provider

We operate across 17 countries and this geographical diversity means that 42% of our lending and 46% of our net operating income for 2007 was from outside Iceland. Our services include retail and corporate banking, investment banking, capital markets services, asset management and wealth management for private banking customers.

Financially strong

We have very strong capital and liquidity levels (amongst the strongest of many European banks) with €8.9billion of liquid assets, over €30 billion of total assets and UK loan assets in excess of £5 billion (as at 31 December 2007). This year we have a debt repayment schedule of just €800m – with liquid assets more than 10 times this repayment schedule we are in an enviable position.

Our current credit ratings, by both Moody’s (A2/P1) and Fitch (A/F1), are strong and imply high credit quality and strong capacity for payment of financial commitments. They are similar to many other financial services providers operating in the UK.

Well funded

Unlike many institutions, we are strengthened by a very high ratio of customer deposits to loans - 70% of all loans are funded by customer deposits. This means that we are not heavily reliant on the wholesale capital markets for funding. To put this ratio in context, HBOS (Halifax/Bank of Scotland) has a ratio of 57.5%, Alliance & Leicester 56%, Bradford & Bingley 60% and Lloyds TSB 72.3%. Just before its crisis Northern Rock had a ratio of 25%.

A careful and prudent lender

We have no direct or indirect exposure to the US sub-prime mortgage market or other structured credit products like Collateral Debt Obligations (CDO’s), Collateral Loan Obligations (CLO’s) and Special Investment Vehicles (SIV’s) that have created losses for many banks. Our operations are also principally focused in Western Europe.

Highly profitable

Unlike many other large US and European banks which have posted profit falls and losses last year, we posted a stable pre-tax profit of €520 million for 2007. This was as high as 2006 despite all the turbulence in the banking sector you will have read so much about.

Well regulated

We are regulated by the Icelandic regulator (FME) in Iceland and the Financial Services Authority (FSA) in the UK. On 7 February 2008, the FME announced that after a routine and stringent ‘stress test’ of the banking system, we are strong enough to withstand severe shocks to the financial system because of our strong levels of capital.

Whilst we are an international financial services provider our head office is based in Iceland. You may find it reassuring to know:

The Icelandic economy is strong

Iceland’s Government enjoys the highest possible credit rating (AAA), with a strong governmental fiscal position. Iceland is the sixth richest economy in the Organisation for Economic Co-operation and Development (OECD) as ranked by Gross Domestic Product (GDP) purchasing power per capita and is a member of the European Economic Area (EEA). Its economy is anchored by industry sectors unaffected by the current worldwide economic downturn, such as food production, technology, natural resources and energy production.

And for your added peace of mind:

You are benefiting from exactly the same level of deposit protection as every bank in the UK

Like savers with any other UK bank, Icesave customers are entitled to deposit protection of up to £35,000 per account holder of all their deposits with us.

The deposit protection is provided by the Icelandic compensation scheme (approximately £15,000) and topped up to £35,000 from the UK Financial Services Compensation Scheme.

In the extremely improbable event of a claim being made under the schemes, the relevant authorities will co-ordinate any claim and will ensure that compensation is paid as promptly as it would be under a single scheme.

Edited by MJS

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Yeah all good here. Icesave instant access money winging it's way through the rickety old BACS to NRK as we speak.

6 month Icesave bond due to mature in June, hopefully it'll still be around to pay my tax bill. ;)

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Yeah all good here. Icesave instant access money winging it's way through the rickety old BACS to NRK as we speak.

BACS arrive probably tommorow then , do it AFTER the bank holiday to squeeze that bit more :)

NR ;) , the've sorted that annoying applet .

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But thanks for the concern, its touching! ;)

Thats OK , it was genuine , if you give me your address i'll send you a big bunch of flowers as well ;)

How are things in Uxbridge these days anyway ?

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In case you guys miss this on the main forum ...........

http://www.housepricecrash.co.uk/forum/ind...showtopic=72027

also look at post 5

I do hope for you guys that your cash is safe .

In reference to post 5: I'm a bit surprised that Andy Jones caused himself so much trouble when it's far simpler if you just log in and transfer the money out. You can even select CHAPS as an option.

Subject to the account Terms & Conditions, it is possible to close your account online. Select Make a Transaction page and follow the on-screen instructions. You should enter the full balance of your account when prompted and then confirm that you wish to close your account by clicking the tick box. Your full balance, including any interest accrued but not yet applied to your account will be transferred by BACS to your selected account within 4 business days. You must remember to print out your final statement at this stage.

This method is far better on the blood pressure and grey hairs!

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In reference to post 5: I'm a bit surprised that Andy Jones caused himself so much trouble when it's far simpler if you just log in and transfer the money out. You can even select CHAPS as an option.

I'm 99% sure i've seen this guy post on the forum that he had 500k in Icesave , possibly true as he's mentionend several times he's got a big STR pot , i had about 100k in there at one time and thought that was enough.

Did you bail out of Icesave in the end ?? as i recall you putting up threads about there financial strength .

Now about this Barclays ISA , hmmmm that's a difficult one that , keeping me a wake at night deciding on that one :lol:

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Guest absolutezero

I do wonder how genuine all this scaremongering about Iceland banks is.

Is there any truth in it or is it just a plot to try and keep British money in British banks?

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That was my view in the absence of specific information about the Icelandic banks. What changed my mind was the emergency increase of Icelandic interest rates to 15% last week. That is a definite sign of instability and so while I still have some money in Icesave, I've move the rest out.

It's been observed before but it's worth repeating. I think the Icelandic banks have been on the receiving end of a concerted media campaign. It would be unthinkable for journalists in the likes of the Telegraph and Times to similarly start speculating that your money might not be safe in Alliance & Leicester, Bradford & Bingley or a whole range of other UK banks. No mentions either that ING and the Anglo-Irish banks have the same guarantees as the Icelandic banks. Journalists don't point out that EGG can freeze your account for several weeks to prevent a run on the bank. They'll be the first to crow that they 'broke the Northern Rock story' though. Whether it's a rising or falling economy, the media are most definitely part of the problem. Thank god for HPC.

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  • 297 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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