# Where to put savings to protect against a default?



## smallThought (15 May 2011)

Hi.

This is probably a stupid question but I just wanted to ask to be sure.

I have money in a bank account at the moment and am wondering what is the best thing to do to protect the money in case Ireland defaults.

From my reading if Ireland defaults my cash would be converted from euros to pounds and since pounds will undoubtedly crash at that point I'd lose a lot.

So my question is:
Assume I transfer my money from cash to an Irish company investing in a non-Irish Equity Fund, say InvestAndSave.ie - International Equity for simplicity.

Will my money be safe?


I would assume (making the numbers up) that if I have €50k in a fund and Ireland changes to £ and new exchange rates goes to €1 = £2 then this should up in end in my account showing £100k so no damage done.

Is that correct?

This seems obvious but I would like to be sure.

  Thanks, Vincent


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## bryanod (16 May 2011)

Your difference is?

€1 = £2 is a massive crash in the value of the punt nua. All you've done is add in a new risk into the equation in terms of the far more real and immediate one of market risk.


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## smallThought (16 May 2011)

> €1 = £2 is a massive crash in the value of the punt nua


I know. That's why I said I was 





> making the numbers up


This is the *Investments* part of the forum so I am only asking about the investment implications of the default, anything else would be off topic.

My question is am I protected from the euro to pound conversion caused if we default?

I know if I buy shares I would be insulated from currency fluctuations until I sell (10 shares in SPY will still be 10 shares no matter what currency my broker displays). 
I want to know if the same is true of funds in the event of a default.


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## Jigsandreels (17 May 2011)

*Are online stock accounts safe if we default*

If a person held stock in an online account such as tdwaterhouse.ie, would that stock be safe in the event of default?????


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## Black Rock (24 May 2011)

*"Default" -  Parliamentary Question - PQ to Minister Noonan*

On Tuesday 12 April 2011 the Minister for Finance responded to a Parliamentary Question (PQ) from Deputy Catherine Murphy with regard to default. 
For completeness I have copied the PQ and the Minister’s reply – 

*122. Deputy Catherine Murphy asked the Minister for Finance if a risk assessment has been carried out since September 2008 in relation to a sovereign default; if so, what are the contingency arrangements; and if he will make a statement on the matter. *

[FONT=Calibri,Calibri]*[FONT=Calibri,Calibri]Minister for Finance (Deputy Michael Noonan): [/FONT]*[/FONT]
_[FONT=Calibri,Calibri][FONT=Calibri,Calibri]In relation to the issue of sovereign default, let me be clear: Ireland has never contemplated the possibility of defaulting on its sovereign debt and this position has been restated on several occasions. The Government, without any question, will fully honour all its legal obligations to its creditors and has no intention whatsoever of allowing a default. [/FONT][/FONT]_


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## smallThought (24 May 2011)

To quote *Yes Minister*

_"The first rule of politics: never believe anything until it's                been officially denied."


_


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