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Good news for those with Icesave accounts

Newbold Avatar
8y, 1m agoPosted 8 years, 1 month ago
UK depositors to be covered by government intervention:

http://news.bbc.co.uk/1/hi/business/7658417.stm
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Newbold Avatar
8y, 1m agoPosted 8 years, 1 month ago
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#1
So more tax payers money to bail out the rich.

It was their chocie to put their money in the risky account with a high interest.
banned#3
ajay87
So more tax payers money to bail out the rich.

It was their chocie to put their money in the risky account with a high interest.


Rich people?!! U never know, maybe some normal people have savings accounts also!
#4
[SIZE=5]I should think so too !![/SIZE]

Chancellor Alistair Darling has said he will ensure all UK savers with accounts in the closed Icelandic internet bank Icesave get all their money back.
He told the BBC he was doing this because the Icelandic authorities had reneged on their obligations to ensure compensation could be paid.
Icesave's parent bank, Landsbanki, was taken over by the Icelandic government on Tuesday and declared insolvent. The internet bank has about 300,000 customers in the UK.

Remember that a lot of the people with money here will only have a couple of hundred or thousand pounds in savings ... which could be ALL their hard earned savings. Of course they should get it back.
banned#5
snowtiger
[SIZE=5]I should think so too !![/SIZE]

Chancellor Alistair Darling has said he will ensure all UK savers with accounts in the closed Icelandic internet bank Icesave get all their money back.
He told the BBC he was doing this because the Icelandic authorities had reneged on their obligations to ensure compensation could be paid.
Icesave's parent bank, Landsbanki, was taken over by the Icelandic government on Tuesday and declared insolvent. The internet bank has about 300,000 customers in the UK.

Remember that a lot of the people with money here will only have a couple of hundred or thousand pounds in savings ... which could be ALL their hard earned savings. Of course they should get it back.


Maybe they should have invested it in a UK bank then instead of being greedy to get a slightly higher interest rate. Why should my taxes pay for other peoples financial incompetence?
#6
colinsunderland;3144987
Maybe they should have invested it in a UK bank then instead of being greedy to get a slightly higher interest rate. Why should my taxes pay for other peoples financial incompetence?

One way or the other we are all having to pay the price at the moment for 'other peoples incompetence' ... This isssue is just 'one tiny speck in the ocean' compared to the problems of the world & us Brits need to support each other now more than ever!
banned#7
Which is exactly my point, if these people had invested in a uk bank (ie supporting british business) rather than trying to get an extra quarter percent interest then they wouldn't be in this situation.
Surely if you don't support British banks then if it goes tits up you can't really complain?
#8
Ajay87 / Colin

Your comments demonstrate your ignorance and lack of ability to understand the reasoning for the gvmnts actions.

Its amazing to listen to / read some of the articles / comments being posted. Truly baffling
banned 1 Like #9
Forsaken
Ajay87 / Colin

Your comments demonstrate your ignorance and lack of ability to understand the reasoning for the gvmnts actions.

Its amazing to listen to / read some of the articles / comments being posted. Truly baffling


Well thanks for explaining the reasons so well
FWIW I do understand the reasons, however I don't agree this should extend to foreign banks.
Why not go one step further and get the government to compensate all shareholders who have lost money recently and why not people who are in negative equity too?
Those also have the same types of effect on the economy as losing money you have in a bank account, but I don't think they should get money from the government either.

If you want to gamble with your savings (ie get say a 4% return from a uk high interest account or 5% from a foreign one but with no protection), be it in shares, property or foreign financial institutions, if you lose then you shouldn't expect tax payers to help you out. If I go to the bookies and stick £1000 on a horse and it loses I wouldn't expect anyone to help me out.
banned#10
I would expect that any bank, regardless of country, should have something in place to protect their customer deposits. But we all know they are only to a certain amount.

If you have £1m and put it in a savings account, it is a gamble whatever Bank it is, UK or abroad.

You could keep it under your bed, but you be sure your house would burn down!
banned 1 Like #11
Forsaken;3145311
Ajay87 / Colin

Your comments demonstrate your ignorance and lack of ability to understand the reasoning for the gvmnts actions.

Its amazing to listen to / read some of the articles / comments being posted. Truly baffling

Spot on!

The ISA operated by Icesave was from a UK subsidiary of Landsbanksi and had the full approval of the Inland Revenue and The Financial Services Authority. It was a WHICH best buy for months and also recommended by Martin Lewis on MSE saying it was a safe bank.

Most people had low ISA deposits so hardly bailing out the rich.
banned#12
csiman
Spot on!

The ISA operated by Icesave was from a UK subsidiary of Landsbanksi and had the full approval of the Inland Revenue and The Financial Services Authority. It was a WHICH best buy for months and also recommended by Martin Lewis on MSE saying it was a safe bank.

Most people had low ISA deposits so hardly bailing out the rich.


Well said, repped
banned#13
And lets clear up some of these 'bail out' comments:-

This liability would only come into play if the following set of circumstances arose:-

1. Icesave went into Liquidation
2. The bank didnt have enough to cover deposits (it has one of the highest liquidity levels of the banks on this planet - 63%)
3. The passport compensation scheme was not honoured by Iceland (the country would have to declare itself bankrupt to do this).
4. The nordic countries did not come to Iceland's aid under their reciprocal trading agreement (or even russia come to that).
5. The EU did nothing to help (quite likely)

Lets not forget that only the first £16,170 is at risk here for savers anyway as the remainder up to £50,000 is covered under the FSCS.

Total liabilities could possibly reach £1BN if it came to the worst but this is miniscule compared to the banks bail-out of £50BN. Not to mention this is savers we are talking about, not fat cats and shareholders (who knew the risks).

Darling also stated he would seek legal action to recover any UK losses.

The only issue I can see that people should be upset about is the payment of deposits above £50,000 as even UK banks do not offer that (except northern Rock and NSI). That risk was wholly apparent so I do agree that this is something to comment on.
#14
colinsunderland
Well thanks for explaining the reasons so well
FWIW I do understand the reasons, however I don't agree this should extend to foreign banks.
Why not go one step further and get the government to compensate all shareholders who have lost money recently and why not people who are in negative equity too?
Those also have the same types of effect on the economy as losing money you have in a bank account, but I don't think they should get money from the government either.

If you want to gamble with your savings (ie get say a 4% return from a uk high interest account or 5% from a foreign one but with no protection), be it in shares, property or foreign financial institutions, if you lose then you shouldn't expect tax payers to help you out. If I go to the bookies and stick £1000 on a horse and it loses I wouldn't expect anyone to help me out.


You obviously dont understand given your first statement in re extending it to foreign banks. Given your lack of understanding, Ill try to keep things as simple as I can

The parent is in fact a foreign bank but Icesave is registered in the UK under Company Number FC26112 and therefore is a UK company. The group is also regulated by the Financial Services Authority for the conduct of UK business - whether it be through Icesave or any other company. Youd be surprised to find out that most banks that you consider to be "British" are actually owned by foreign parents (Santander come to mind??). If your thought process applied - UK should reneg on saving any of those banks as well??

The FSA was created with several objectives in mind one of which is promoting efficient orderly and fair markets (and within this objective you have two sub categ which apply here - market confidence (ie maintaining confidence in the financial system) and consumer protection (securing the appropriate degree of protection for consumers)).

The fact that it is a foreign institution is irrelevant !! Its the fact that UK savers would have lost confidence in the financial system which in turn would most likely have caused an unwarranted run on a majority of banks (other than Northern Rock and NSI) forcing several other banks to collapse which would have had other major consequences

Obviously the FSA will now be forced to review the passport exemption under which Landsb was operating and review the current rules in re FSCS ( by potentially eliminating a partial payment by a foreign compensation scheme altogether) but that's another matter

The most efficient way for the gvmnt to have handled this would have been to announce that it would have covered / paid out any losses suffered for the first E 20k provided that savers assigned their rights to the gvmnt for it to then claim from the Icelandic compensation scheme (which was most likely what was going to be announced) but unfort given the Icelandiv gvmnt's statement they were forced to make the announcement this morning that they would gtee all savings held in Icesave accounts by UK savers

The fact that you even use the word gamble in the above excerpt is mind boggling

As to tax payers bailing the poor people who were unlucky enough to have their savings with Icesave, I suspect that theyve paid enough taxes over the years to more than justify getting some of it back so you should really refrain from making such ludicrous comments especially since some of them have paid more taxes than you will over your lifetime
#15
Glad to hear that the UK is considering taking legal action against Iceland and freezing assets until this is sorted out...

----------------------------------

Chancellor Alistair Darling has said he will ensure all UK savers with accounts in the closed Icelandic internet bank Icesave get all their money back.

He told the BBC he was doing this because the Icelandic authorities had reneged on their obligations to ensure compensation could be paid.

Icesave's parent bank, Landsbanki, was taken over by the Icelandic government on Tuesday and declared insolvent.

The internet bank has about 300,000 customers in the UK.

In these exceptional circumstances we will stand behind those depositors so they get their money back

Chancellor Alistair Darling

"We guarantee that no depositor will lose any money as a result of the closure of Icesave," said a Treasury spokesman.

As part of its plan the UK government has frozen all the British assets of Landsbanki until the position of savers in the UK becomes clear.

Under a deal organised by the Treasury, just over 22,000 people with savings in the Heritable bank, also owned by Landsbanki, are also being rescued.

Their accounts, amounting to £538m, are being transferred to the control of the giant Dutch bank ING.

'Exceptional circumstances'

"The Icelandic government, believe it or not, have told me yesterday they have no intention of honouring their obligations here," said Mr Darling.

It appears the chancellor is concerned about ordinary savers and ordinary families as well as saving the banks

Icesave account holder Mike Davis

"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.

"The British scheme would top that up to £50,000, but people over and above that would lose out," he added.

"But I have decided in these exceptional circumstances that we will stand behind those depositors so they get their money back."

Details of the government's plans will be announced in the Commons later on Wednesday.

Saver's reaction

Saver Mike Davis, 62, who has £75,000 in retirement savings locked up in an Icesave account and admitted he had not slept for days, said he was "highly relieved and thankful" after hearing the chancellor's pledge.

"It has restored my faith in Britain and the British government," he said.

"It appears the chancellor is concerned about ordinary savers and ordinary families as well as saving the banks."

The Treasury said that arrangements were being put in place to ensure that all ISA customers of Icesave would continue to benefit from the tax-free status of their accounts.

Insolvent

The collapse of Landsbanki, its Icesave subsidiary, and its UK bank Heritable, had left UK savers in limbo.

They first heard of its problem on Tuesday when they saw a statement on the Icesave website saying that it was not allowing customers to move money in or out of their accounts.

Shortly afterwards Landsbanki was taken over by the Icelandic authorities to stop it collapsing as part of the international credit crunch.

The Heritable bank went into administration and is being run by administrators from the accountancy firm Ernst & Young.

Legal action

The closure of Icesave triggered an expectation that UK savers should get at least the first £50,000 of their money back under normal compensation arrangements for insolvent banks.

In theory the first tranche of that cash, up to 20,887 euros (£16,170) should have come from the Icelandic depositors compensation scheme, with the rest being paid out by the UK's own Financial Services Compensation Scheme.

Prime Minister Gordon Brown said the UK would take legal action against Iceland over its failure to guarantee compensation.

But a Treasury spokesman said "we are working with the Icelandic authorities to ensure the money is paid back as soon as possible".
banned#16
Forsaken
Obviously the FSA will now be forced to review the passport exemption under which Landsb was operating and review the current rules in re FSCS ( by potentially eliminating a partial payment by a foreign compensation scheme altogether) but that's another matter

The most efficient way for the gvmnt to have handled this would have been to announce that it would have covered / paid out any losses suffered for the first E 20k provided that savers assigned their rights to the gvmnt for it to then claim from the Icelandic compensation scheme (which was most likely what was going to be announced) but unfort given the Icelandiv gvmnt's statement they were forced to make the announcement this morning that they would gtee all savings held in Icesave accounts by UK savers

But thats my point, why, if another government refuses to pay why would people lose confidence in the uk economy? I know the FSA would guarantee up to £50000 from the passport level, it was the first bit I don't agree with our gvment paying.

The fact that you even use the word gamble in the above excerpt is mind boggling

Why? You invest your money in a bank that isn't covered fully under the FSA scheme in the UK, then surely you are gambling that the bank doesn't go bust?

As to tax payers bailing the poor people who were unlucky enough to have their savings with Icesave, I suspect that theyve paid enough taxes over the years to more than justify getting some of it back so you should really refrain from making such ludicrous comments especially since some of them have paid more taxes than you will over your lifetime


Oh so that means I can't have an opinion just because someone has paid more tax than me?

I am probably in the minority but I don't think its right that taxes should be used to compensate the better off
#17
colinsunderland
But thats my point, why, if another government refuses to pay why would people lose confidence in the uk economy? I know the FSA would guarantee up to £50000 from the passport level, it was the first bit I don't agree with our gvment paying.



Why? You invest your money in a bank that isn't covered fully under the FSA scheme in the UK, then surely you are gambling that the bank doesn't go bust?



Oh so that means I can't have an opinion just because someone has paid more tax than me?

I am probably in the minority but I don't think its right that taxes should be used to compensate the better off


So it should be used to pay your benefits instead then??? :whistling:

Seriously though, this was a bank recommended by the daily mail, financial times, money facts, which, mse, etc. etc. etc. because of this the 300,000 odd UK customers of this bank are more than likely a lot more financially astute than your comments imply. In fact up until this last few days or so Icesave was considered a damn good place to have your ISA. It's only right that these savers should be covered as much as everyone else, and your comments about bailing out the rich are utter nonsense, it's the first 16k that is being discussed so it's actually the less well off investors that would loose out most. i.e if the worst happens and because the Icelandic government wont pay up investors with < 16k loose everything unless the UK government steps in.
banned#18
colinsunderland


I am probably in the minority but I don't think its right that taxes should be used to compensate the better off



I didnt think we wwere talking about the better off, these people with savings can be normal working class people.

Lets not forget that if these Banks start to make profits again, the tax payer will be better off, and presumeably will share part of these profits?
banned#19
megalomaniac
So it should be used to pay your benefits instead then??? :whistling:


what benefits would those be? I signed on for around a year when I was 17, am 41 now. I get nothing at all in the way of benefits, and haven't for 24 years, even when I was entitled too.

Seriously though, this was a bank recommended by the daily mail, financial times, money facts, which, mse, etc. etc. etc. because of this the 300,000 odd UK customers of this bank are more than likely a lot more financially astute than your comments imply. In fact up until this last few days or so Icesave was considered a damn good place to have your ISA. It's only right that these savers should be covered as much as everyone else, and your comments about bailing out the rich are utter nonsense, it's the first 16k that is being discussed so it's actually the less well off investors that would loose out most. i.e if the worst happens and because the Icelandic government wont pay up investors with < 16k loose everything unless the UK government steps in.


well the first £16k and over £50k.
By the better off I didn't mean rich, just have a look at some of the threads on here to see what I mean.
People working and not being able to afford a night out, not being able to afford any luxuries, that type of thing. They are unlikely to have any savings at all, let alone in a foreign bank. Yet they pay taxes.

hankmarvin4
Lets not forget that if these Banks start to make profits again, the tax payer will be better off, and presumeably will share part of these profits?


How will an Icelandic bank starting to make profit again leave our tax payers better off?
#20
Does anyone ever stop to ask themselves where the government are getting the money to bail people out?

I do, all the time.
banned#21
Personally I dont think they should bail these investors out. Why should I pay for their decision to invest overseas? Its irrelivant that someone at MSE said it was a safe bank. I had shares to the value of £34K invested in Railtrack. The government acted illegally in my view in suspending the company and not give them the chance to get investors to rescue. They were wrong to do this, but nonetheless, they didnt bail out those investors (me included).

All investments are to some extent a gamble. I took the gains when they were there with a smile and took the pain when they failed. That's life.

On top of this of course and genuine reason for my views here - the guys at the top and their huge bonuses. Don't suppose they have any guilt over their failed management and give that money back? Not necessary really, I'll help bail it out. Not to worry.
banned#22
colinsunderland




How will an Icelandic bank starting to make profit again leave our tax payers better off?


Apologies, was talking about the bail out in general.

Think you might need to call it a day on this one, some good posts (not mine!) have you more than beaten
banned#23
hankmarvin4
Apologies, was talking about the bail out in general.

Think you might need to call it a day on this one, some good posts (not mine!) have you more than beaten


But I'm talking about foreign banks only. I do agree with the reasons why uk banks should be bailed out, as if they didn't the economy would be totally screwed.
banned#24
colinsunderland
But I'm talking about foreign banks only. I do agree with the reasons why uk banks should be bailed out, as if they didn't the economy would be totally screwed.


Yup. My view also. (With the caveat regarding the crazy bankers bonuses for cocking it up in the first place!)
1 Like #25
Quick to bail out savers in Icesave............who invested with them knowing that only the first £12 thousand was guaranteed.........so could offer higher interest rates......................I paid into a Equitable Life pension for 25 years...........the FSA were shown guilty of maladministration in NOT doing their job of keeping an eye on the cowboys running Equitable Life.....................i am at least £15000 down on my pension fund.........................................any Icesave savers fancy bailing me out........NO government help for us.......were paying in for our pension...............not stashing our cash and pleading poverty..............
banned#26
antenna;3149034
Quick to bail out savers in Icesave............who invested with them knowing that only the first £12 thousand was guaranteed.........so could offer higher interest rates...................................

If you dont know what you are talking about then dont bother :whistling:
banned 1 Like #27
guv;3148783
Personally I dont think they should bail these investors out. Why should I pay for their decision to invest overseas? Its irrelivant that someone at MSE said it was a safe bank. I had shares to the value of £34K invested in Railtrack. The government acted illegally in my view in suspending the company and not give them the chance to get investors to rescue. They were wrong to do this, but nonetheless, they didnt bail out those investors (me included).

All investments are to some extent a gamble. I took the gains when they were there with a smile and took the pain when they failed. That's life.

On top of this of course and genuine reason for my views here - the guys at the top and their huge bonuses. Don't suppose they have any guilt over their failed management and give that money back? Not necessary really, I'll help bail it out. Not to worry.


colinsunderland;3148833
But I'm talking about foreign banks only. I do agree with the reasons why uk banks should be bailed out, as if they didn't the economy would be totally screwed.

I'll say it again as I guess you guys dint read what I said (this is not B&B):-

lets clear up some of these 'bail out' comments:-

This liability would only come into play if the following set of circumstances arose:-

1. Icesave went into Liquidation
2. The bank didnt have enough to cover deposits (it has one of the highest liquidity levels of the banks on this planet - 63%)
3. The passport compensation scheme was not honoured by Iceland (the country would have to declare itself bankrupt to do this).
4. The nordic countries did not come to Iceland's aid under their reciprocal trading agreement (or even russia come to that).
5. The EU did nothing to help (quite likely)

Lets not forget that only the first £16,170 is at risk here for savers anyway as the remainder up to £50,000 is covered under the FSCS.

Total liabilities could possibly reach £1BN if it came to the worst but this is miniscule compared to the banks bail-out of £50BN. Not to mention this is savers we are talking about, not fat cats and shareholders (who knew the risks).

Darling also stated he would seek legal action to recover any UK losses.

The only issue I can see that people should be upset about is the payment of deposits above £50,000 as even UK banks do not offer that (except northern Rock and NSI). That risk was wholly apparent so I do agree that this is something to comment on.

THE ISA SAVING SCHEME AT ICESAVE WAS FULLY APPROVED BY THE INLAND REVENUE AND THE FSA. Most people are small time investors like you & me.
1 Like #28
guv
Personally I dont think they should bail these investors out. Why should I pay for their decision to invest overseas? Its irrelivant that someone at MSE said it was a safe bank. I had shares to the value of £34K invested in Railtrack. The government acted illegally in my view in suspending the company and not give them the chance to get investors to rescue. They were wrong to do this, but nonetheless, they didnt bail out those investors (me included).

All investments are to some extent a gamble. I took the gains when they were there with a smile and took the pain when they failed. That's life. .


They are not investors - they are savers. Railtrack was an investment not a saving

Also all the bailouts to date have to some extent punished equity investors by limiting the scope of the bailout to just under the debt holders. Fannie May, Freddie Mac etc investors lost their investment and rightfully so ...

Huge difference between investing in stocks and depositing money in a bank account

colinsunderland
But I'm talking about foreign banks only. I do agree with the reasons why uk banks should be bailed out, as if they didn't the economy would be totally screwed.


Again - it was a UK company offering Inland Revenue approved ISAs to UK residents. If you consider it foreign because of the parent, then applying your logic, Abbey National and B&B amongst others should also be viewed as foreign banks
banned#29
It now appears that this 'bail out' wont cost the taxpayer a penny:-

The Government used anti-terrorism powers to freeze an estimated £4 billion of British financial assets in Landsbanki, Icesave’s parent bank. A spokesman for the Treasury said that the 2001 Anti-Terrorism, Crime and Security Act was invoked as a “precautionary measure”.
#30
csiman
If you dont know what you are talking about then dont bother :whistling:


7850 posts............were they all as interesting as the one above?
banned#31
antenna;3152773
7850 posts............were they all as interesting as the one above?

Whilst you may not find it interesting, at least I know what I'm talking about rather than writing completely inaccurate statements like you did. Don't believe everything you read in the daily sport mate! :whistling:

And is there a law against having a high post count? its not my fault I'm unemployed so have a lot of time free!

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