IMF entry, where to bank?

FuzzyFrog

Given the strong likelihood that the IMF may come in to Ireland and subsequently call the shots to the near nationalised banks AIB/BOI - should people consider moving savings to the likes of Ulster Bank/Rabo, further afield?

howamidifferent

FuzzyFrog wrote: »

Given the strong likelihood that the IMF may come in to Ireland and subsequently call the shots to the near nationalised banks AIB/BOI - should people consider moving savings to the likes of Ulster Bank/Rabo, further afield?

Bury it in a field might be safer...:pac:

Accountancy

Hi Fuzzyfrog, You basically asked the question i was going to post.
What happens where you have money on deposit. Currently it is covered by the government under the guarantee scheme. But if the IMF come in is it safe? Is it still covered by the guarantee?

FuzzyFrog

Well is the Irish Govt. guarantee not a bit null and void now. If BOI were to go under tomorrow where are they getting this money to pay back all the depositors? Bond Market, EU fund? Not a chance.

Rabo is covered by the Dutch guarantee up to 100k, Ulster Bank by the Brits?

Now if the IMF came in I don't know happens then. Could they tax every Irish person's lump sum no matter what banking institution it was in? I think the lack of financial literacy (mine included) out there will panic a lot of people. I haven't a clue what to do at the moment but I certainly don't trust the Irish government or the Irish banks for one second.

dotsman

You're money is perfectly safe in the Irish banks.

The whole issue of EU/IMF involvement is regarding the massive budget deficit and nothing to do with bank deposits.

We are a part of the Euro. Should we revert back to the punt, then yes - transfer your money to a euro account, but until that day happens, the banks are perfectly safe.

TelePaul

dotsman wrote: »

You're money is perfectly safe in the Irish banks.

The whole issue of EU/IMF involvement is regarding the massive budget deficit and nothing to do with bank deposits.

Not to call you out on this but could you maybe elaborate a little? I'm very much like the above posters and would like to save what meagre savings I have! It seems that AIB has a current market cap. of EUR 312m. Should they go under, I'm curious as to the validity of a financial guarantee offered by a government that is effectively broke.

I know there are probably other factors at play and I don't want to seem like I'm siding with the nay-sayers.

dotsman

TelePaul wrote: »

Not to call you out on this but could you maybe elaborate a little? I'm very much like the above posters and would like to save what meagre savings I have! It seems that AIB has a current market cap. of EUR 312m. Should they go under, I'm curious as to the validity of a financial guarantee offered by a government that is effectively broke.

I know there are probably other factors at play and I don't want to seem like I'm siding with the nay-sayers.

Well, firstly, AIB's market capitalisation is pretty much €5 billion higher than that, given that the NTMA is underwriting their rights issue in a few weeks which will bring in €5 billion (the current share price has already taken this dilution into account).

With regards "going under", this is extremely unlikely. Given that they and BOI are the two main banks, they simply can't be allowed "go under". Should they do so, we, as a country have a lot more to worry about than the few billion being used to buy shares in them.

There has been a lot of speculation in the media (always focusing on the extreme bad news etc:mad:) regarding the current bond market crisis. However, the EU is very blatant with it's policy of "no bank going under". If they wouldn't allow Anglo go under, they certainly won't let a primary clearing bank go under. To do so would trigger a massive recession and financial crisis part 3 across the whole of the EU!

It's not a question of the banks or this country "going under". It's a question of how much we have to give up (in terms of cutting the budget deficit) to stay afloat. The current bond market crisis is caused by the fact that international markets are not confident that the government can implement the savings they are promising, that a new government won't be in place in a few months time that might undo this work (for example, if Labour were to be the sole party or the majority party in the new coalition, the markets would have a complete heart attack:)), that we won't break out in loads of strikes/riots etc like France/Greece over the coming months/year etc.

Basically, if the government can put forward a plan in a few weeks time, and the markets believe that (A) it will work and (B) that whoever governs this country for the duration of the plan stick to it (or tweak it slightly for the better) then things will begin to go back to normal. Should they still not have any faith, the EU/IMF will roll into town and put in a plan for us.

Listen, it is complicated (far too much to go into on a thread), and nothing is 100% certain. All I'm saying is that there is no need for people to panic.

Anywy, I think we are bordering on this rule, so I'm going to stop here.