Money for rainy day.

femur61

I know this has been asked and answered millions of times (slight exageration, like our initial debt).

• If we default will bank deposits still be safe?
• If we default will we be able to borrow money to pay PS?
• Are we safe till after 2015 before chances of defaulting?

I've saved and want to protect my deposits, kids education, rainy day, which has arrived. Instead of going to bed with unions and giving themselves over indulgent wages government should have had some foresight now the eejits have dipped in pension fund.

FoxT

As far as I know, the chance of Ireland defaulting is very low. But, If we were to default right now, some banks would fail & the Govt would not have the money to ensure depositors were repaid in full.

If I had savings I'd consider splitting them up & moving to say a UK bank or Rabobank or similar.

There are other threads on this, I reckon if you search for Rabobank you will find them pretty quickly.

PCPhoto

my understanding is if the banks go tit's up - all monies in them go too.

apologies for the crude analogy ...but if a bank crashes - it takes no prisoners - have a look at iceland (the country ...not the shop) .... riots happened, savings were wiped.

(I could be wrong - I'm not in any way associated with any economics knowledge )

karlth

PCPhoto wrote: »

my understanding is if the banks go tit's up - all monies in them go too.

apologies for the crude analogy ...but if a bank crashes - it takes no prisoners - have a look at iceland (the country ...not the shop) .... riots happened, savings were wiped.

Savings were not wiped.

Bond and stockholders got wiped out, not deposit holders.

westtip

femur61 wrote: »

I know this has been asked and answered millions of times (slight exageration, like our initial debt).

• If we default will bank deposits still be safe?
• If we default will we be able to borrow money to pay PS?
• Are we safe till after 2015 before chances of defaulting?

I've saved and want to protect my deposits, kids education, rainy day, which has arrived. Instead of going to bed with unions and giving themselves over indulgent wages government should have had some foresight now the eejits have dipped in pension fund.

I reckon this is the answer to your questions:

No - by defaulting we will not have the money for the guarentee
No - definitely not - defaulting puts you on the black list for international borrowing on the markets
No - open to opinion - if the Croke Park Agreement stays in place then no we are not safe.

I would go along with others and move your money to Rabobank or out of Euros entirely. The National Pension Reserve Fund will be eroded and will disappear. If we default we will have live within our means - ie on about 30 billion tax take per annum, if we default (and I doubt it will actually come to that) we will not be able to borrow money to pay the PS or Social. It won't be pretty but we will at last have to stand on our own two feet.

Bob_Latchford

westtip wrote: »

I reckon this is the answer to your questions:

No - by defaulting we will not have the money for the guarentee

Im all for bondholders sharing the burden, but think the idea that an Irish government will burn Irish depositors in high street banks even if they cant support the banks totally with the full guarantee is unlikely.

I have money in AIB its not alot (under the current guarentee) but I think the hassle of moving it is more than its worth.

digme

Bob_Latchford wrote: »

Im all for bondholders sharing the burden, but think the idea that an Irish government will burn Irish depositors in high street banks even if they cant support the banks totally with the full guarantee is unlikely.

I have money in AIB its not alot (under the current guarentee) but I think the hassle of moving it is more than its worth.

Being Complacent lol... No wonder the banks have us bent over and are riding us....

Bob_Latchford

Not really the risk in leaving it there is less than cost of moving it.

All in my opinion of course.

Fat_Fingers

Bob_Latchford wrote: »

Im all for bondholders sharing the burden, but think the idea that an Irish government will burn Irish depositors in high street banks even if they cant support the banks totally with the full guarantee is unlikely.

I have money in AIB its not alot (under the current guarentee) but I think the hassle of moving it is more than its worth.

You have placed all your money on one bet and that bet been that everything will stay as it is. Like everything the government has told us was true so far. Since you have taken this gamble I have to assume you are also ready to lose everything in worst case scenario.
I would say if you have any loans outstanding pay it off and then gamble the rest of the money on AIB casino.

I know a businessman who took a week off to go to Switzerland to open a bank account. I guess his gamble is bigger.

Bob_Latchford

Fat_Fingers wrote: »

You have placed all your money on one bet and that bet been that everything will stay as it is.

Your imagining that, I didnt write it

zig

westtip wrote: »

I reckon this is the answer to your questions:

No - by defaulting we will not have the money for the guarentee

but what about the money that is actually deposited in the bank?

zig

femur61 wrote: »

I know this has been asked and answered millions of times (slight exageration, like our initial debt).

• If we default will bank deposits still be safe?
• If we default will we be able to borrow money to pay PS?
• Are we safe till after 2015 before chances of defaulting?

1/ This one still get me as well. Would like a detailed answer on it from someone, afaik Iceland just decided not to pay back their loans but they obviously had enough money to save deposits. Im not sure.

2/No we will have to have a very quick change in PS and welfare spending, a 4 year process will be pressed down to an almost instant process, however there is a chance that we would receive bilateral loans as other countries also need us to have a functioning economy. Also if we were to leave the Euro we could print our own money , the problem with this is we would have to be cautious while devaluing our currency. Also I wonder is it possible that if we defaulted could we apply for a small bailout from the IMF to keep us tied over while we restructured. This would be cheaper than paying back all the other debts plus current EU/IMf bailout.

3/ No, there really is no way of knowing whats going to happen, Spain and Portugals lending interest rates are shooting up, Greece 10 year bond interest rates are nearly back to the point they were before receiving a bailout.
Also , this bailout relies on our economy to grow when in actual fact there is alot of reason to think it will shrink further. This is all speculation though.

Patr2

FoxT wrote: »

As far as I know, the chance of Ireland defaulting is very low. But, If we were to default right now, some banks would fail & the Govt would not have the money to ensure depositors were repaid in full.

If I had savings I'd consider splitting them up & moving to say a UK bank or Rabobank or similar.

There are other threads on this, I reckon if you search for Rabobank you will find them pretty quickly.

if the banks go as far as i know the European central bank also backs up deposits under the bank quarantee scheme...

Bob_Latchford

zig wrote: »

1/ This one still get me as well. Would like a detailed answer on it from someone, afaik Iceland just decided not to pay back their loans but they obviously had enough money to save deposits. Im not sure.

Karl has said that they didnt have enough money for every depositor. There was significant dutch and UK depositors in their internet brands.
I think they ring fenced domestic deposits and the foreign deposits are still outstanding

http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16539&ew_0_a_id=370239

A draft of an agreement between Icelandic, British and Dutch authorities on the dispute regarding Landsbanki’s Icesave deposits payback scheme has been completed and presented to parties of interest.

SkepticOne

femur61 wrote: »

I know this has been asked and answered millions of times (slight exageration, like our initial debt).

• If we default will bank deposits still be safe?
• If we default will we be able to borrow money to pay PS?
• Are we safe till after 2015 before chances of defaulting?

I've saved and want to protect my deposits, kids education, rainy day, which has arrived. Instead of going to bed with unions and giving themselves over indulgent wages government should have had some foresight now the eejits have dipped in pension fund.

Here's what I think.

1. If we were to default, most likely our banks would fail as they are being propped up by the state guarantee. (Ironically this guarantee is partly responsible for bringing the country to this point). Whether deposits would be safe would depend on whether there's enough money in reserves to cover them. Under the deal, we are being required to run down our reserves before we draw down the bailout loan. Therefore any default has to happen soon or not at all if deposits are to be saved.

2. PS Pay: no not the full amount. In the aftermath of a bailout all outgoings have to be funded by tax revenue (assuming we've run down the reserves). There would probably be a 30 per cent reduction in salaries or thereabouts. The unions might insist on sackings for junior staff on the basis of last in first out rather than pay reductions for established staff.

3. I think we are safe for the next few years.

All the above imho.