Rabobank Safe?

JOHNPT

I am considering opening a new account with Rabobank. My question concerns a worst case scenario regarding the Irish Economy. Say things get worse and Bank of Ireland is nationalised too and we leave the euro and the Government impose capital restrictions on withdrawing money from deposits in the banks (like they did in Argentine) would the same restrictions be placed on deposits in Rabobank? How safe is Rabobank? It is reported it is the 6th safest bank in the world but would it come under Irish Government control in a worst case scenario as it operates in the state?



I know all the above is hypothetical but I would like the opinions of some of the informed posters here. Thanks in advance.

Adrock-aka

It's as safe as you'll get! Ireland haven't made it easy for rabo to operate here. Ireland can't take control of them either regardless of what happens.

homer911

Firstly Rabobank is a Dutch bank, not an Irish Bank, so the worst case scenario is that they would be taken over by the Dutch government

Secondly, RaboDirect is a branch of Rabobank, so all funds are denominated in Euro by virtue of this - the geolocation of the funds is irrelevant

Rabobank made nearly €3b last year, and made over €2b per annum in the worst years of the recession - given that, as you say, they are rated as the sixth safest banks (I think the top 5 are government owned) and that they are AAA rated I cant see how you could consider them unsafe

challenges

What about KBC bank in Ireland... is it safe?

Raskolnikov

JOHNPT wrote: »

Say things get worse and Bank of Ireland is nationalised too and we leave the euro and the Government impose capital restrictions on withdrawing money from deposits in the banks (like they did in Argentine) would the same restrictions be placed on deposits in Rabobank? How safe is Rabobank?

I have e-mailed RaboDirect about this. They were unable to give an answer guaranteeing that your savings will be safe from conversion to Irish Punts, or whatever the new currency would be.

This is a highly unlikely scenario. There have been no reports in Ireland or any other country within the EU about leaving the Eurozone, which was also confirmed by the EU President Jean-Claude Trichet in the Irish Times earlier this year. But if this were to happen then most likely there would be legislation put in place to guide the transfer from Euro to the currency that Ireland would adopt. We would also have to evaluate what would be the best course for RaboDirect and its customers in this situation, keep balances in Euro and/or transfer to the new Irish currency. Again this is an very unlikely situation.It is important to remember that your funds are held within the Rabobank Group covered under te Dutch Deposit Protection Scheme, so it does not matter whether your funds are held in Ireland or Australia for instance, as they are still covered.

I would suspect that if Ireland were to leave the Euro, then legislation would be passed that would compel all banks operating in Ireland to transfer deposits to the new currency, otherwise capital controls would be imposed. Britian did this with Icelandic assets, I suspect that the Irish government could do likewise in the event of such extreme circumstances.

Mr. Loverman

Argentina didn't just impose withdrawal restrictions, they also converted all deposits into pesos, e.g. from dollars to pesos overnight.

Raskolnikov

Capital controls were definitely imposed on Argentina. Even if you had your deposits denominated in Peso's, the Peso was continually devalued against the Dollar, so savings were practically wiped out.

http://www.economicpopulist.org/content/capital-controls-and-what-you-should-know

My thoughts on this are that if you just want to be cautious, it's best to take your money out of a bank that operates in this country under terms laid down by the financial regulator.

irishh_bob

Mr. Loverman wrote: »

Argentina didn't just impose withdrawal restrictions, they also converted all deposits into pesos, e.g. from dollars to pesos overnight.

argentina,s curreny was never the dollar , however , the argentine peso was pegged ( :rolleyes:) to the dollar , on monday the peso was equal to one dollar , on tuesday , it was equal to 33 cents :eek:

Raskolnikov

irishh_bob wrote: »

argentina,s curreny was never the dollar , however , the argentine peso was pegged ( :rolleyes:) to the dollar , on monday the peso was equal to one dollar , on tuesday , it was equal to 33 cents :eek:

True, but a lot of rich Argentinians held bank accounts in Argentina that were denominated in Dollars.

http://en.wikipedia.org/wiki/Argentine_Currency_Board#Abandonment_of_the_peg

Mr. Loverman

irishh_bob wrote: »

argentina,s curreny was never the dollar , however , the argentine peso was pegged ( :rolleyes:) to the dollar , on monday the peso was equal to one dollar , on tuesday , it was equal to 33 cents :eek:

Most people's accounts were in dollars. They converted them to pesos in a 1:1 ratio so most people lost about 80% of their savings.

andrewdeerpark

That old man in Cork Regional Hospital with 50K strapped to his body was not such a fool afterwards.

Forget bank default, Ireland leaving the Euro would be the real threat to savers I know if I get a whiff of Irish Euro exit I will be down to the bank to get my small bit of savings in hard cash.

I would bet my mortgage would not be devalued though....

JOHNPT

I still haven't got a definitive reply to my question. If Ireland default is money safe in RaboDirect or could the deposits be
A - Taken over by the Irish Government as the bank operates within the state?

I would be interested to hear from some of the Moderators or frequent contributors to this thread. Thanks in advance

Mr. Loverman

JOHNPT wrote: »

I still haven't got a definitive reply to my question. If Ireland default is money safe in RaboDirect or could the deposits be
A - Taken over by the Irish Government as the bank operates within the state?

I would be interested to hear from some of the Moderators or frequent contributors to this thread. Thanks in advance

I doubt any of us a banking law experts, so you might be better of asking Rabo.

Raskolnikov

JOHNPT wrote: »

I still haven't got a definitive reply to my question. If Ireland default is money safe in RaboDirect or could the deposits be
A - Taken over by the Irish Government as the bank operates within the state?

I would be interested to hear from some of the Moderators or frequent contributors to this thread. Thanks in advance

John, did you read the canned reply I got from Rabo?

There is no definitive guarantee from Rabo that your deposit will be safe from being converted to new Irish Punts or taken by the Irish State. Even having the money offshore might not be a guarantee of safety (although I suspect it would be ok) given that the Irish government could push for the repatriation of deposits.

irishh_bob

Raskolnikov wrote: »

John, did you read the canned reply I got from Rabo?

There is no definitive guarantee from Rabo that your deposit will be safe from being converted to new Irish Punts or taken by the Irish State. Even having the money offshore might not be a guarantee of safety (although I suspect it would be ok) given that the Irish government could push for the repatriation of deposits.

in the event of a euro exit , savings with rabbo ( ireland ) would most certainly be converted to the new ( weaker :mad:) currency but i seriously doubt the goverment could sieze any savings held there

JOHNPT

Thanks for the replies. Its an interesting scenario - I guess there are no definitive answers

MICKEYG

This is a HUGE question. Does anyone know the easiet way to move EUR savings out of an Irish Bank to a foreign bank (either operating here or physically setting up an overseas account) so that in the event of a default the savings remain in Euro (or CHF, not picky ).

Seriously, I have had to pay out so much so far to pay off other poeples debt that if the money I saved because I didn't jump on the property ponzi scheme is also taken by a default I may not be liable for my actions.

andrewdeerpark

Agree entirely, its a HUGE question and one that needs putting to David McWilliams, listened to him on Pat Kenny and he was championing cheaper exports, debt write-off benefits, however no mention of the fact that in Argentina savers lost 80% of their savings in a devaluation and inflation rocketed (cheap TV’s, Cars overnight expensive)
Morgan Kelly in his wisdom does not suggest a Euro exit and has the most credibility.
Anyway back to protecting your money, I see 3 options for ordinary individuals:
- Take it out in Hard Cash (get 500euro denominations) this is only suitable for small savers
- Go to Northern Ireland, England or another EU country and open a non resident account then transfer your funds via international transfer to your new account. Setup Internet banking on the account to keep an eye on it. The account has to be outside the Irish Financial regulator so Rabobank, Danske is no good.
- Transfer your all your savings entirely into foreign shares, bonds or funds. No use having Irish Listed shares. You should be safe using an Irish stockbroker as the holding is priced in a foreign currency.
That’s my ideas any more appreciated….

irishh_bob

MICKEYG wrote: »

This is a HUGE question. Does anyone know the easiet way to move EUR savings out of an Irish Bank to a foreign bank (either operating here or physically setting up an overseas account) so that in the event of a default the savings remain in Euro (or CHF, not picky ).

Seriously, I have had to pay out so much so far to pay off other poeples debt that if the money I saved because I didn't jump on the property ponzi scheme is also taken by a default I may not be liable for my actions.

i have a euro account with hsbc bank in northern ireland , in order to have a euro account with hsbc, you are required to open a sterling account , this means you have to pay fees on two accounts and hsbc fees are borderline extortionate , 8 pound per month for each account regardless of what use you ever make of the facilitys , going down the road of oppening a foreign account can be a bit of a nuisance to put it mildly