# Moving deposits out of Irish banks into non-Irish owned - who guarantees what?



## marshmallow (20 Jan 2009)

Given the major problems with the Irish banking system at the moment, I have lost faith in the govt deposit guarantee and am considering moving all my deposits out of Irish-owned banks and into the non-Irish-owned banks like Ulster, Rabo and NIB where I believe (hope) they would be safer. Safety and not rates is my priority at the moment.

Am I correct in saying that Ulster is guaranteed by the UK gov, Rabo by the Dutch and NIB by the Danis gov? 

Feels like a knee-jerk reaction but better to be safe than sorry I feel. What do other AAM members think about this strategy?


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## MysticX (20 Jan 2009)

marshmallow said:
			
		

> Given the major problems with the Irish banking system at the moment, I have lost faith in the govt deposit guarantee and am considering moving all my deposits out of Irish-owned banks and into the non-Irish-owned banks like Ulster, Rabo and NIB where I believe (hope) they would be safer. Safety and not rates is my priority at the moment.


 
Oddly enough since Anglo was recently nationalised wouldn't it be one of the safest Irish banks?



			
				marshmallow said:
			
		

> Am I correct in saying that Ulster is guaranteed by the UK gov, Rabo by the Dutch and NIB by the Danis gov?


Mmmm i'm not sure about Ulster, take for example Halifax which is Bank Of Scotland's Ireland retail business though it's covered by the Irish deposit protection scheme of 100% of the first 100k (they opted out of the blanket deposit protection offer for competitive reasons).
Rabo is covered by the Dutch scheme yes (likely overhauled during the turbulence last year).
NIB is covered by the Danish scheme (overhauled).

If you think the government is going to be bankrupt then the very safest banks I can think of off the top of my head would be:
-Rabo: has always been conservative (and quite uncompetitive as of late) though this appears to have paid off as they weren't hit nearly as bad as the other banks if they were hit at all. They also hold a AAA rating and are arguably one of the safest banks in the world.
-Northern Rock: nationalised by the British government. Offers one of the top accounts for on demand (as this is been written). 



			
				marshmallow said:
			
		

> Feels like a knee-jerk reaction but better to be safe than sorry I feel. What do other AAM members think about this strategy?


Bar extremely rare exceptions the majority of Irish banks are always somewhat behind the competition (i'm open to correction on this) in terms of offerings for deposits so you just may tackle two issues in the one go.


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## 9428522 (20 Jan 2009)

Marshmallow, look at what's happening to Sterling/JPY or Sterling/USD today - significant weakening of the pound.  Some commentators are saying that this is due to fears that RBS and other UK banks will have to be nationalized and that the UK Government may be in no better position to take on their liabilities than Iceland was to take on those of its banks.  Therefore the concerns you voiced about the Irish government guarantee could equally apply to any of the UK banks which have subsidiaries operating in Ireland.

I'm not very familiar with the Danish or Dutch government finances, perhaps other members could provide some colour.


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## lemur (20 Jan 2009)

Difference is the BOE can print money and liquefy their banks in this way. 

The Irish govt needs the ECB to do this for them in order to bail out the banks here. This complicates things and makes the Irish banks less safe.


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## Guest116 (20 Jan 2009)

MysticX said:


> NIB is covered by the Danish scheme (overhauled).


 
What do you mean by overhauled?


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## MysticX (20 Jan 2009)

aristotle25 said:
			
		

> What do you mean by overhauled?


Significantly changed with improvement... i.e. the older schemes didn't pay out nearly as much.

For those of you who are interested here's a breakdown of the various deposit protection schemes operating in Ireland and it seems uptodate from what I can tell:
http://www.itsyourmoney.ie/index.jsp?1nID=100&nID=153&aID=620

One thing to note is that NIB's parent Danske is covered by a Danish government guarantee scheme.


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## Labguy (26 Jan 2009)

I suspect a fair few people are concerned that the Irish Euro might be devalued.  I.E. that we will end up with a new 'punt' worth perhaps 20-40% less than present.  This would very nicely restore our competitiveness at the expense of deposit holders and no cost to mortgage holders (or developers)

If you're in a safe bank like Rabo your Euros would  become 'punts' - so in a sense they would not be all that safe at all?


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## ardmacha (26 Jan 2009)

> This would very nicely restore our competitiveness at the expense of deposit holders



This would nicely restore our our competitiveness at the expense of taxpayers, as all government debt is Euro's rather than "punts". With government borrowing needs increasing this would be a doomsday scenario.


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## dub_nerd (26 Jan 2009)

My life's savings are in Rabo, even though I am taking a considerable hit on interest for the privilege ... I would not touch an Irish bank with a barge pole. If I didn't trust my bank I would probably put the cash under the mattress: I certainly wouldn't be relying on a government guarantee, Irish or otherwise.


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## josip (27 Jan 2009)

Labguy said:


> I suspect a fair few people are concerned that the Irish Euro might be devalued. I.E. that we will end up with a new 'punt' worth perhaps 20-40% less than present. This would very nicely restore our competitiveness at the expense of deposit holders and no cost to mortgage holders (or developers)
> 
> If you're in a safe bank like Rabo your Euros would become 'punts' - so in a sense they would not be all that safe at all?


 
This has become a growing concern to me over the last 2 weeks. Can the government forcibly convert all existing euros held in accounts in the state into "krona-punts"? I would have thought it more likely to happen in a nationalised bank than a foreign owned one? How do you legally hedge against this? Can I transfer money to a bank in another EU country even though I'm not a resident there?


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## Gautama (6 Feb 2009)

marshmallow said:


> Am I correct in saying that Ulster is guaranteed by the UK gov, Rabo by the Dutch and NIB by the Danis gov?
> 
> Feels like a knee-jerk reaction but better to be safe than sorry I feel. What do other AAM members think about this strategy?



I'm thinking the very same thing.
I used to be a rate tart going for high interest.
Given the current climate I'd prefer Rabo giving a return of 3% rather than risk of the Irish banks returning -100%.

What I'd like to know is what countries are available?
Denmark via NIB.
The Netherlands via Rabo.
The United Kingdom via Investec, Leed BS, etc.
Anywhere else?


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## Sorbet (6 Feb 2009)

I'm in a similar dilemma to original poster. I have proceeds of our house sale in AIB and although I think it is unlikely that Ireland will face an Icelandic situation I just can't take the chance. Is the UK a better option - i.e. Northern Rock etc or a number of people say Rabo? Any advice greatfully received as I feel like a homeowner with no house insurance with an arsonist living next door.


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## Lightning (7 Feb 2009)

Sorbet said:


> I'm in a similar dilemma to original poster. I have proceeds of our house sale in AIB and although I think it is unlikely that Ireland will face an Icelandic situation I just can't take the chance. Is the UK a better option - i.e. Northern Rock etc or a number of people say Rabo? Any advice greatfully received as I feel like a homeowner with no house insurance with an arsonist living next door.



Irish based deposits institutions are guaranteed by the Irish Government who are AAA negative rated. 

UK based deposits institutions are guaranteed by the UK Government who are AAA stable rated.

The risk of either defaulting is very low but the risk is lower with the UK Govt based on the credit agencies ratings.


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## Pope John 11 (8 Feb 2009)

This thread posts exactly what I have been thinking over the last month or so. However I have been constantly directed to the governments guarantee to cover all banks, for reassurance. Here is my situation:

My Main bank is BOI for incoming wages, outgoing mortgages etc.

BOI current Acc. feeds BOI Easy Saver Acc. - €500/month - 7%
& feeds FA Regular Saver Acc. - €1,000/month - 5.4%, was 7.15% previously.

AIB current Acc. feeds AIB Regular Saver Acc. - €300/month - 5.25%

FA - Fixed rate Lump sum Acc. - 6.5% - 1 year

Anglo IB - Premium Demand Acc. - 4.75%

In light of some of the previous posters on this thread, should I be putting my regular savings & Lump sum amounts elsewhere, such as NR, Rabo, Halifax etc, so as to not have it all under the cover of the Irish Guarantee?


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## Omega (9 Feb 2009)

Gautama said:


> .....What I'd like to know is what countries are available?.....Denmark via NIB, The Netherlands via Rabo,
> UK via Investec, Leed BS, etc. - Anywhere else?


Would *Advanzia *be an option worth considering?


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## Pope John 11 (9 Feb 2009)

Omega said:


> Would *Advanzia *be an option worth considering?


 
What do you know about this bank, yes I was thinking of a german bank too?

I heard that the German Finance Minster was looking to resign...however permission has to be sought from the main leader...& she said no.

How is the German economy at the moment... with the motor industry not doing so well?

I also heard that the government introduced a scrappage scheme to get rid of cars over 10yrs old, offering the public €2,000....to stimulate the industry.


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## Omega (9 Feb 2009)

Pope John 11 said:


> .....What do you know about this bank....
> I was thinking of a German bank too?.....


I don't know anything about Advenzia, except that they seem to be covered by the Luxembourg guarantee scheme. Keytrade in Belgium seem to operate a similar bank (they do share-trading as well but  have lower deposit rates). As far as Germany is concerned, they have their troubles but not to the degree of those in Ireland, from what I can see. I was thinking of opening an a/c in Germany - Postbank, maybe. I've got a son living there and could use his address to register, though I'm not really sure if you have to live there yourself or whether having a theoretical address is sufficient.....


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## Gautama (10 Feb 2009)

Pope John 11 said:


> ...to the governments guarantee to cover all banks, for reassurance...
> 
> In light of some of the previous posters on this thread, should I be putting my regular savings & Lump sum amounts elsewhere, such as NR, Rabo, Halifax etc, so as to not have it all under the cover of the Irish Guarantee?



If all the banks fail the governments guarantee is close to worthless.  The state can't afford the €440 billion.

Of course, "all the banks fail" is as far-fetched in Feb 2009 as "Anglo will be nationalised" was in Feb 2007.  All bets are off.

My own view is "don't keep all your eggs in one basket".
If you have cash, don't keep it all in Ireland.  Spread it around.

Rant follows:
Investment is about diversification.
Many of those people that lost money on the Irish banks had no other significant shareholdings.  They lost their money because they ignored the basic principles.
There are four basic investment classes: property, shares, bonds and cash.
Invest in them all.
With shares, diversify: banks, construction, transport, food, leisure, et cetera.
The same applies to cash: different banks, different countries.


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## Omega (10 Feb 2009)

Gautama said:


> .....The same applies to cash: different banks, different countries.....


But what about Josip's question: _Can the government forcibly convert all existing euros held in accounts in the state into "krona-punts"?_


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## Gautama (10 Feb 2009)

Omega said:


> But what about Josip's question: _Can the government forcibly convert all existing euros held in accounts in the state into "krona-punts"?_



Dunno.
My hope is that Euro abroad would remain as Euro.
Euro here would be devalued into "an punt nua".


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## pudds (13 Feb 2009)

I hear that the best country at the moment to go looking for employment is Australia, so if that being so, is it possible and would it be worth considering putting some cash in an Australian bank.


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## Nermal (13 Feb 2009)

Omega said:


> But what about Josip's question: _Can the government forcibly convert all existing euros held in accounts in the state into "krona-punts"?_



Yes, ultimately, the government could do this.

And could redenominate all external debt also - today we owe you EUR100, but at midnight we will convert that to 100 kronapunts, and if at one minute past midnight the kronapunt is worth 20c, hey, that's your problem Fritz.

Legalities don't really come into it when this sort of stuff is envisaged, it's just sorted out after the fact.


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## Gautama (17 Feb 2009)

pudds said:


> I hear that the best country at the moment to go looking for employment is Australia, so if that being so, is it possible and would it be worth considering putting some cash in an Australian bank.



I got an e-mail from a friend in Australia. She can't find professional work at the moment so has taken up a job in a cafe.
I wouldn't describe such a situation as "the best" but it may well be "the least worst".


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## ionix5891 (17 Feb 2009)

how do people feel about keeping lumpsums in Ulsterbank (RBS) and Postbank (Fortis)?


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## Fanny (17 Feb 2009)

Have you considered the German UMWELTBANK? They are doing pretty well and sustainability is a growth field. As far as I can remember they were happy with my Irish address, but you need to pay Irish tax on interest. I am not a customer yet but I seriously consider them, as their investment in Green technology makes sense to me. Comments welcome.

[broken link removed]
[broken link removed]

German economy is very depressed also, but no housing bubble and alot of future sustainable industry 
Not sure about the Postbank though, they took a bad hit.


Fanny


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## 9428522 (17 Feb 2009)

For those concerned about this issue, I think this is very good news:

German finance minister says larger Euro zone members would bail out smaller ones in the event of insolvency:
http://bloomberg.com/apps/news?pid=20601068&refer=home&sid=aGwRmgq6Tz7w

I thinks this makes deposits at Irish banks safer because the idea is to prevent economic contagion.  So I think its logical to expect that if we got to the point where the Irish government were in danger of defaulting, it would effectively be bailed out by France/Germany and therefore Irish depositors would be bailed out too.  If depositors were allowed to suffer losses, the economy would implode, which would be contrary to the whole idea of a bailout.


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## North Star (17 Feb 2009)

This realy is a Global problem. Whats curretly happening in Eastern Europe will be as bad as what we are dealing with, except they are not in the Euro. Be careful moving bank accounts out of Ireland. German/Austrian/Belgian bank exposure to CEE countries will cause them significant problems. Finding a real safe have is very difficult. Ireland has the protection of Euro membership, and in times of stress countries tend to look after their own citizens first.


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