# who controls the post offfice deposits?



## dockingtrade (15 Nov 2010)

Who controlls the PO deposits, saving certs, bonds and prize bonds? It doesnt give out loans so it must be one of the most solvent and liquid institutions in europe or is that cash controlled by the govt. 

In the case of a default by the govt would the post office cash be at risk?
Its never mentioned as a source of funding for the govt. what does the saving certs and term bond cash get used for exactly ? If its to finance the the country why is it not mentioned as a source of funding ie pension reserve x amount, finance rised through sovereign bonds y amount


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## Brendan Burgess (15 Nov 2010)

It is collectected by An Post, on behalf of the National Treasury Management Agency, I think.


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## mmclo (15 Nov 2010)

Certs and bonds etc. are part of the national debt??


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## jpd (15 Nov 2010)

Yes - see here [broken link removed]


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## dockingtrade (15 Nov 2010)

jpd said:


> Yes - see here [broken link removed]


 
thanks for that, interesting.

Why dont the govt issue annual bonds tax free interest at 4% or 5% to Irish citizens? So lower interest repayments and the cash stays in the country.


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## jpd (16 Nov 2010)

That would probably suck in even more retail deposits from the banks, and because the Government guaranteed the banks, it would just move the problem down the line and not solve anything.


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## Protocol (16 Nov 2010)

dockingtrade said:


> Its never mentioned as a source of funding for the govt.


 
It is.


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## galleryman (16 Nov 2010)

Does State Savings have any solvency requirements, or is it the VHI of the deposit world?


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## Protocol (16 Nov 2010)

I don't understand your point?

An Post act as a deposit-taker on behalf of the NTMA, who borrow funds from savers.


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## galleryman (16 Nov 2010)

my point is, if everyone who deposited money through An Post went in to withdraw their money, how much of that money would actually be available, 20%, 45%, 100%???  Does NTMA need to maintain a defined % of deposits on reserve?


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## mmclo (16 Nov 2010)

Yes on rereading the OP I see the point. Where is the money day to day so to speak. Is it used to pay gaurds, nurses and social welfare. If Ireland runs out of money is this the riskiest kind to hold. Of course they are gaurunteed like banks but presumably banks have some cash knocking aorund adue to mr elderfields solvency raios although given media reports you wonder.

So do the regulators solvency ratios apply to An Post, First Direct is regulated like a bank but what about the entire operation so to speak?


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## Protocol (16 Nov 2010)

I see, you are referring to a reserve or liquidity requirement.

Don't know for sure..

But the NTMA always have a cash balance, so I suppose they use that to meet withdrawals. Or else they borrow from somewhere else.


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## Protocol (16 Nov 2010)

From the NTMA's annual report:​

*RETAIL SAVINGS*
The NTMA has a number of schemes designed to attract funds from domestic private investors.
These are Savings Bonds (3 year), Instalment Savings (5 year), Savings Certificates (5½ year), Prize Bonds and Post Office Savings Bank Deposit Accounts. These products, and the National Solidarity Bond issued in 2010, are now branded as “State SavingsTM” to reflect that they constitute a direct obligation of the Irish Government.​


During 2009 there were net inflows of €1.76 billion into the retail savings products, the highest level of inflows in any year since the establishment of the NTMA in 1990. At end-2009 the total amount outstanding was €9.3 billion, equivalent to 12 per cent of the National Debt. A further €346 million was outstanding in accrued interest.​

With the exception of Prize Bonds, the schemes are operated by An Post on behalf of the NTMA. Prize Bonds are operated by the Prize Bond Company Limited – a joint venture between An Post and FEXCO, a financial services company.​


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## sunrock (16 Nov 2010)

People with certs and bonds with An Post have to wait until the maturity date so they can`t  all take their money out at once.Even if depositors all decided to withdraw their money over  a number of years, the government could always meet depositors demands by raising more from taxation. Don`t forget the government has enormous tax raising power.


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## oldtimer (16 Nov 2010)

sunrock said:


> People with certs and bonds with An Post have to wait until the maturity date so they can`t all take their money out at once.Even if depositors all decided to withdraw their money over a number of years, the government could always meet depositors demands by raising more from taxation. Don`t forget the government has enormous tax raising power.


People with certs and bonds with An Post do not have to wait until the maturity date - they can be withdrawn at any time.


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## mmclo (16 Nov 2010)

Protocol said:


> From the NTMA's annual report:​
> 
> *RETAIL SAVINGS*
> The NTMA has a number of schemes designed to attract funds from domestic private investors.
> ...


 
So there is no liquidity requirement, it is dependent on the liquidity of the state which is tetering on the edge?


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## jpd (17 Nov 2010)

In any case, there isn't a bank in the world with enough liquid reserves to stem a run on the bank - that would be contrary to the definition of a bank. 

Banking is a confidence game, where you get money from people who have some to spare or who have money not immediately required and lend it to others who have needs they can't meet from their own resources.

But without banking, most of our modern world would stop working so it is incumbent on govts to make sure we have a working banking system. The Irish Gov't and regulator took their eye of the ball and now they are struggling to regain control.


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## mmclo (17 Nov 2010)

jpd said:


> In any case, there isn't a bank in the world with enough liquid reserves to stem a run on the bank - that would be contrary to the definition of a bank.
> 
> Banking is a confidence game, where you get money from people who have some to spare or who have money not immediately required and lend it to others who have needs they can't meet from their own resources.
> 
> But without banking, most of our modern world would stop working so it is incumbent on govts to make sure we have a working banking system. The Irish Gov't and regulator took their eye of the ball and now they are struggling to regain control.


 
Indeed but the new regulator has enfoerced and strengthened solvency ratios hence the problems in the Quinn group. These apply to all the high st banks and other financial institutions. What we are trying to gauge is whether An Post (as opposed to One Direct it's banking subsidary) is covered by such ratios. It would seem it is not on the basis that much of it's funds are simply national debat under another name.


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## galleryman (17 Nov 2010)

If the NTMA are fully funded in terms of paying Garda, teachers, nurses and let's not forget politicans until mid 2011, then I guess the NTMA has enough cash somewhere to cover my deposit right now!!


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## Towger (17 Nov 2010)

From : http://www.prizebonds.ie/corpinfo.html



> The Prize Bond Company Ltd. is a joint venture operated between An Post and FEXCO.
> The company was set up in 1989 to operate the scheme for the Minister for Finance. The scheme is now operated on behalf of the National Treasury Management Agency (NTMA) which manages the national debt on behalf of the Minister for Finance. In 2009 the company submitted a successful tender to operate the scheme for a further 10 years until September 2019.
> 
> An Post is responsible for the accounting, marketing and the conduct of the draw. The administration is carried out by FEXCO in Killorglin, Co.Kerry


.


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## mick_dundee (23 Nov 2010)

*Who?*

So who then controls the Post Office Deposits?

Do they fall under the state bank guarantee?


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## Black Rock (18 May 2011)

*The brochures on the State Savings website provide most of the information requested.*

*The brochures on the State Savings website provide most of the information requested.*

NTMA State Savings is the brand name used by the National Treasury Management Agency (NTMA) to describe the range of savings products offered by the NTMA to personal savers. 

The NTMA offers a range of fixed term deposit accounts with terms from overnight to 10 years and also offer Prize Bonds. The list of products includes 3 year Savings Bonds, 4 year National Solidarity Bond, 5 ½ year Savings Certificates, 6 year Instalment Savings, 10 year National Solidarity Bond, Ordinary Deposit Account and Deposit Account Plus. 

An Post and the Prize Bond Company are agents of the NTMA for the operation of the State Savings™ schemes. 

However, neither An Post nor the Prize Bond Company retain or manage any State Savings™ money. All State Savings™ money is under the management of the National Treasury Management Agency.

The repayment of State Savings money is a direct, unconditional obligation of the Government, there is no upper limit on the amount of money that is protected and there is no expiry or end date for this protection. 

The post office simply provide a counter service to collect savings money on behalf of the Government and the post office immediately, every day, hand all savings money over to the Government under the management of the National Treasury Management Agency

For this reason the published annual accounts of the post office (An Post) do not provide any statistics on any savings products because none form any part of the financial statements of An Post. All NTMA State Savings products including Prize Bonds are accounted for only in the annual accounts of the National Treasury Management Agency (NTMA) and are identified as being part of the national debt or sovereign debt of Ireland.


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