From the BBC:
The watchdog conducting an inquiry into local authorities' decisions to invest in Icelandic banks has admitted it has also got £10m tied up in the country...
I can't claim for one second to have actually seen this coming* any more than they did, but I never even considered sticking my savings in an Icelandic (or any other foreign bank) just to earn a measly extra per cent or two in interest, the risks of being caught out like this just don't make it worthwhile.
* Umbongo (see comments) did see it coming and acted accordingly!
Thursday, 26 March 2009
Classic egg/face scenario
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8 comments:
One might have hoped they'd learned something at least from the Western Isles Council investing money with BCCI (though I read a while ago that WIC actually did very well indeed out of the whole thing, assessed over a 10 year timescale, because they benefited massively from the change in the $:£ excghange rate ).
The basic argument of the singularly unimpressive "spokespersons" on the Toady programme was "they weren't bust when we put the money in" and that "we put our last tranche in 20 minutes before their credit rating was changed". Makes you wonder about due diligence.
Perhaps the Court of Public Opinion should drag its knuckles around to where they live, repossess their index-linked pensions, and bust their windows?
MV: "but I never even considered sticking my savings in an Icelandic (or any other foreign bank) just to earn a measly extra per cent or two in interest"
Ah, British banks are so safe.
If you had savings in A&L for example, would you move them because it is now owned by Santander?
Oh please! Warnings about Iceland (and by extension its banks) were widespread in the press certainly from the beginning of 2008 and adverse comment was common all through 2007. No genius on our part but, mainly because of the persistent public drumbeat of concern about Iceland, Mrs U and I removed our deposits (except for a few hundred pounds which the FSCS has kindly refunded) from IceSave in January and June last year.
Unfortunately, the dildos masquerading as financial experts in local authorities (exemplified both by the barmy cow on Today and the finance department of the London Borough of Haringey which lost £37 million of council-tax payers' money in the Iceland fiasco) ticked all the boxes, lodged any "common sense" with the nearest diversity champion and kept on depositing.
Anon, as it happens, I have some savings < £50,000 with Abbey and I can't be bothered to shift them (although the thought had crossed my mind). The chances of Abbey going down AND the government not honouring the guarantee are negligible to nil.
"Perhaps the Court of Public Opinion should drag its knuckles around to where they live, repossess their index-linked pensions, and bust their windows?"
They aren't likely to be the targets of the Two Minute Hate, for some reason. Despite being just as culpable.
Why, it's almost as if someone were orchestrating this, isn't it?
Umbongo - seconded. With money, something that looks to good to be true, always, is.
We also decided that Icelandic banks were NBG - how could Icelandic companies become so much more successful in retail then indiginous UK ones?
The final straw when carrying out some basic research was to realise that Iceland's GDP was half that of the county of Suffolk.
None of it made sense, so we were off.
Of course this is also true of all bank shares which were being hammered by the markets well before the Crock went under. I absolutely refused to vote to buy any bank shares in my share club from oooo I guess about 2004 or earlier. If you are at the sharp end of mortgage supply and you cannot understand how they are doing it, you can bet no-one else does either.
MW: "The chances of Abbey going down "
So you are prepared to 'stick your money in' a foreign bank?
Granted Abbey/Santander aren't even giving you a measly extra per cent, though.
MW: "the government not honouring the guarantee are negligible to nil."
Which is the calculation that the subscribers to landisbanki made. No?
There were lots of comments right through 2007 about how Iceland's banking system was based on pretty uncertain looking deals financing Private Equity funds and so on, and that one or two even then looked just about broke.
I was talking to someone tonight whose partner had seen warnings in March last year and pulled out all their savings - an amateur saver with only cash investments.
It beggars belief that bodies that give local authorities guidance on who to invest balances with still included some of the Icelandic banks just days before they collapsed, let alone that so called treasury management staff in councils accepted that advice. But then I guess if they were good at treasury management they would be earning many multiples of what the councils pay them working for a decent financial institution.
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