Banking scare threads and the truth.

DeVore · 08-09-2010 1:39pm #1

A few people like to start "scare threads" of the type "My mate works in <insert bank> and he told me to get my money out / everyones taking their money out / the manager told me we will collapse later today" etc.

Arm yourself with the truth:
http://www.moneyguideireland.com/irish-deposits-guarantee-after-september-2010.html

Cliff notes:

Up to 100K in most/all major banks is guaranteed, by the state, indefinitely.

Past 100K its guaranteed to the end of 2010 and will probably be extended.

Our banking sector, like everyone elses, is in rag order but lets not deal in fanciful nonsense. Stick to the facts.

DeV.

kfallon · 08-09-2010 1:45pm

My mate works in a sperm bank (she's a receptionist) and she says to get down there straight away and make a deposit cos they just got in October's edition of "Hairy Gusset" and she reckons the centre 'spread' is well worth a 'pedal' over.....she reckons it's that good it made her come over all lezzie when she saw it!!!

Terry · 08-09-2010 1:47pm

Feck off with your facts, will ye.

Nijmegen · 08-09-2010 1:47pm

Agreed, though I'm not sure anyone 'likes' to do it - depends on what your life savings amounts to, and where it is sitting, I'm not sure people like the idea of a run or similar, government promises or no.

Mr Benevolent · 08-09-2010 1:53pm

DeVore wrote: »

Our banking sector, like everyone elses, is in rag order but lets not deal in fanciful nonsense. Stick to the facts.

DeV.

Worried about your investments eh? Don't blame you really, I saw the deleted thread. Anyway, it's unlikely there'll be any sort of run on Irish banks.

Banned Account · 08-09-2010 1:55pm

I'd like to see a law passed that makes it fair game to shoot and rob anyone who partakes in a run.

Slydice · 08-09-2010 1:55pm

DeVore wrote: »

Arm yourself with the truth:
http://www.moneyguideireland.com/irish-deposits-guarantee-after-september-2010.html

Cliff notes:

Up to 100K in most/all major banks is guaranteed, by the state, indefinitely.

Past 100K its guaranteed to the end of 2010 and will probably be extended.

Excellent, Thanks for the advice Dev.

I'd been a bit worried looking at the 100 page discussion on politics.ie about a run by something to do with the bond market on Ireland itself.

The discussion seems to be something to do with Irelands chances of defaulting on Irelands debt.

So, then, the first question that comes to mind... that you might have an idea on...

If Ireland goes bust and defaults... then our money in Irish Banks still safe? As in... is our money in Irish banks guaranteed safe if Ireland defaults?

Banned Account · 08-09-2010 1:57pm

Slydice wrote: »

Excellent, Thanks for the advice Dev.

I'd been a bit worried looking at the 100 page discussion on politics.ie about a run by something to do with the bond market on Ireland itself.

The discussion seems to be something to do with Irelands chances of defaulting on Irelands debt.

So, then, the first question that comes to mind... that you might have an idea on...

If Ireland goes bust and defaults... then our money in Irish Banks still safe? As in... is our money in Irish banks guaranteed safe if Ireland defaults?

Why would Ireland defaulting on its debt (which won't happen because they'll just head to the stabilisation fund) have anything to do with your deposit account?

DeVore · 08-09-2010 1:59pm

Countries dont go bust. They go to the IMF with cap in hand and get ridden for $20 a go, but they dont go bust as such.

I'm not an expert, but then neither are the other armchair pundits so I figured some hard facts would be handy.

Oh and 100 page threads debating such things are what you get when you dont moderate the loonies.

DeV.

mike65 · 08-09-2010 1:59pm

Don't worry about defaulting, the EU/ECB will simply not allow it to happen for reasons that have nothing to do with Ireland

Sleepy · 08-09-2010 2:00pm

Possibly... If Ireland defaults on it's debts we'll be in trouble as a nation and wouldn't be able to access the level of borrowing required to pay out any of our guarantees should the banks default.

However, Ireland defaulting is extremely unlikely. The ECB have mechanisms in place (or nearly in place) such as the lending granted to Greece earlier this year which roughly mean that if the markets won't lend to us any more (not entirely unthinkable with such a useless government in place), the ECB will act as a lender of last resort as long as we agree to a set list of austerity measures etc.

stovelid · 08-09-2010 2:00pm

I took that thread at face value and now have my life savings down my underpants.

DeVore · 08-09-2010 2:01pm

The bond markets are one of the markets I was talking about before in the previous piece I wrote about it being the wrong time for violent protest. Bonds are like an IOU from a country... China has been buying fracking billions of the US bonds, hence you wont see any stringent criticism of the Chinese by Obama any time soon. They basically own the states at this point.

DeV.

Slydice · 08-09-2010 2:03pm

So like, do you know if we're in danger of defaulting?

I was reading that international websites have us having more than a 25% chance of defaulting (higher than iraq but lower than iceland)?

Plus back to my big worry, if Ireland Defaults and we have to go cap in hand to the imf like you say...

will our money in Irish banks be safe if Ireland defaults and we have to do a IMF/EU/Whatever deal?

Dravokivich · 08-09-2010 2:06pm

DeVore wrote: »

China has been buying fracking billions of the US bonds, hence you wont see any stringent criticism of the Chinese by Obama any time soon. They basically own the states at this point.

DeV.

They're like the Chelsea and Man City of International Politics ey?

Can't beat'em, buy'em!

:pac:

Logical Fallacy · 08-09-2010 2:06pm

Dearest Dev,

please stop damping the flames of ignornace.

Churs.

08-09-2010 2:08pm

DeVore wrote: »

Oh and 100 page threads debating such things are what you get when you dont moderate the loonies.

DeV.

That's a terrible thing to call the boards community

aliens ate my brain

DeVore · 08-09-2010 2:08pm

As for the "useless government"... while I personally agree they are a shower of retarded monkeys, they have done a couple of things right. guaranteeing the banks right off the bat was smart. It really hacked off the Brits because they played the game to the spirit of the law while the irish kinda stole a march on everyone.

We also enacted SOME kind of austerity measures early on... ok they werent exactly hard hitting and they will be worse this time round but thats what the markets want to see, they dont care if you are in trouble, they want to see that you (the country) are going to take some actions to rectify the situation. Greece didnt, Ireland didnt really either but we made lots of noise about doing so and a big deal out of what was done.

Markets operate on the perception of reality, rather then reality itself. Even if they KNOW themselves that that perception is false. Example, using shares:

You offer me a share for 100 euros. I know the company that the share is in, is a dog with fleas, but I also know that the general perception is that its great and the share will sell for 120 euros easily. So, I buy the share (despite my factually accurate knowledge that the company is ****), because I know the perception is that its good, (false).

Yes, it hurts lots of peoples brains.

DeV.

Banned Account · 08-09-2010 2:09pm

Ironically, the States owns China now - they have to keep buying the bonds or they'll devalue their own national reserve.

DeVore · 08-09-2010 2:11pm

Slydice wrote: »

So like, do you know if we're in danger of defaulting?

I was reading that international websites have us having more than a 25% chance of defaulting (higher than iraq but lower than iceland)?

Plus back to my big worry, if Ireland Defaults and we have to go cap in hand to the imf like you say...

will our money in Irish banks be safe if Ireland defaults and we have to do a IMF/EU/Whatever deal?

I'm not an expert but the country would remain a distinct entity with autonomous control so yes, the deposits would be guaranteed imho, but as I said, this is all hypothetical.

Realistically, the worst case is that the IMF come in and carve up the public sector and hike taxes.

DeV.

Slydice · 08-09-2010 2:12pm

DeVore wrote: »

Example, using shares:

You offer me a share for 100 euros. I know the company that the share is in, is a dog with fleas, but I also know that the general perception is that its great and the share will sell for 120 euros easily. So, I buy the share (despite my factually accurate knowledge that the company is ****), because I know the perception is that its good, (false).

Well that does sound reassuring.

but

What happens to our bank accounts if we default though?

As in, what happens if the person knows the company is **** and the perception is bad so the person doesn't buy ... and then... the company reneges on it's money?

I've not seen anyone say that the guarantee means anything if we default or that our money is safe if Ireland defaults

Cheap Thrills! · 08-09-2010 2:15pm

It's at time like this I'm glad I'm a pauper!

Ya can't lose what you haven't got! :pac:

Slydice · 08-09-2010 2:16pm

DeVore wrote: »

I'm not an expert but the country would remain a distinct entity with autonomous control so yes, the deposits would be guaranteed imho, but as I said, this is all hypothetical.

Realistically, the worst case is that the IMF come in and carve up the public sector and hike taxes.

DeV.

Seriously though, I wasn't wondering about the public sector and tax hikes, I can look at greece to see that.

This thread was created because of "banking scare threads" which I presume is due to a thread about a bank runs that I noticed disapprearing earlier. I get that. That's fine.

I don't think people worry as much about tax hikes and public sector pay when talking about banks though

I think they worry about their bank savings.

So that's why I would really like to know what would happen to our bank savings if Ireland defaults.

alwaysadub · 08-09-2010 2:22pm

I'm off to watch It's A Wonderful Life to prepare myself just in case :pac:

Not that i have any money in the bank in the first place..

Hail 2 Da Thief · 08-09-2010 2:25pm

I'm not at all worried about the safety of my savings being stored in an Irish bank!

Because my cash is safely stored in British banks! :P

DeVore · 08-09-2010 2:27pm

Ireland Inc defaulting on its governmental borrowings is HIGHLY UNLIKELY to be allowed to happen. If it did, it would mean the cost of borrowing for the government would rocket and we'd have to "live within our means".

However, the Bank of Ireland / AIB / Etc are not national banks, they are effectively privately owned businesses and as such wouldnt be immediately affected. The knock on effects might not be pleasant (the guarantee would probably be seen as unsustainable for a start) but again, this wouldnt be allowed to crash the banking system.

So, if Ireland Inc defaulted (very unlikely to be allowed happen) there would be no direct effect on banking here. There may be ramifications but everything along this chain is in the "highly unlikely to be allowed happen" category.

DeV.

DeVore · 08-09-2010 2:28pm

Hail 2 Da Thief wrote: »

I'm not at all worried about the safety of my savings being stored in an Irish bank!

Because my cash is safely stored in British banks! :P

We've never had a bank collapse, even Anglo is being bailed out (wrongly imho). In the UK they have had Northern Rock, RBS, Barings etc etc.

Good luck.

DeV.

newman10 · 08-09-2010 2:29pm

Sleepy wrote: »

Possibly... If Ireland defaults on it's debts we'll be in trouble as a nation and wouldn't be able to access the level of borrowing required to pay out any of our guarantees should the banks default.

However, Ireland defaulting is extremely unlikely. The ECB have mechanisms in place (or nearly in place) such as the lending granted to Greece earlier this year which roughly mean that if the markets won't lend to us any more (not entirely unthinkable with such a useless government in place), the ECB will act as a lender of last resort as long as we agree to a set list of austerity measures etc.

Are they not due in the next budget

ANXIOUS · 08-09-2010 2:29pm

How many people and how much would you have to withdraw to get a run on the banks? I reckon if you went into a busy bank in Dublin city center and withdrew €5000 the daily limit, then start screaming why won't you let me withdraw more money. It would get the rest if the people freaked out and they would try withdraw more money.

AlmightyCushion · 08-09-2010 2:33pm

Your money's in Bill's house and Fred's house.

Slydice · 08-09-2010 2:37pm

DeVore wrote: »

everything along this chain is in the "highly unlikely to be allowed happen" category.

hasn't everything that has happened in the last 3 years been like that?

this new set of banking discussion is revolving around Ireland possibly defaulting from what I can tell.

people want to know their savings are safe and with the banking collapses... the government stepped in with the guarantee and so people knew their savings were safe

but now, it's about Ireland Inc Defaulting, so again, people care about their savings... so answering that savings and default question would at least help people feel like they know what is going on with their savings

but I'm not seeing that being answered.

Banking scare threads and the truth.

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