what happens to bank shares if it goes bust?

[johnnyg]

I have two queries wrt banking shares;
If a bank goes bust obviously you will loose what you invested.
If a bank is taken over by the government, do you still remain your shares?
Cheers

 

[Sunny]

Re: Banking Shares

There is no definite answer as it depends on the plan but you would probably lose most if not all your investment if the bank was nationalised and you would lose the shares

 

[Howitzer]

Re: Banking Shares

But on the bright side you wouldn't be persued for the debts owed by the bank (effectively you as a shareholder).

 

[ClubMan]

Re: Banking Shares

If a bank is taken over by the government, do you still remain your shares?

Didn't NR shareholders effectively lose their shares when NR was nationalized? See [broken link removed] and [broken link removed] for example.

 

[Markjbloggs]

Re: Banking Shares

Generally, equity holders are last in the queue when a bank goes bust, and lose everything. But, it depends on the plan to take over the bank, and with this being the Banana Republic of Ireland, who knows what will happen under those circumstances.

 

[johnnyg]

Re: Banking Shares

can't name banks here but its a query i have because when the goverment help out AIB before, they didn't loose there shares

 

[Sunny]

Re: Banking Shares

can't name banks here but its a query i have because when the goverment help out AIB before, they didn't loose there shares

They didn't nationalise AIB when they bailed it out before. It is very very unlikely you will benefit as an equity holder from any bank being taken over by a Government

 

[johnnyg]

Re: Banking Shares

so if it did happen here, would the government bail out the bank like it did with AIB or would it have to take it over as in nationalise it, is there new laws that the governement must follow on the matter or would they let the bank collapse or be bought over by another bank if feasible..

 

[Sunny]

Re: Banking Shares

so if it did happen here, would the government bail out the bank like it did with AIB or would it have to take it over as in nationalise it, is there new laws that the governement must follow on the matter or would they let the bank collapse or be bought over by another bank if feasible..

There is no set course of action. They would always prefer for another bank to take them over but it really depends on the circumstances. I would imagine they would have to nationalise any of the big banks if they failed if they couldn't attract foreign interest. It is unlikely a Government loan would be enough to save any bank anymore. Its gone past that.

 

[dieter1]

Re: Banking Shares

There is no set course of action. They would always prefer for another bank to take them over but it really depends on the circumstances. I would imagine they would have to nationalise any of the big banks if they failed if they couldn't attract foreign interest. It is unlikely a Government loan would be enough to save any bank anymore. Its gone past that.

What do you define as a big bank. I presume that means the big 2? Are Anglo and Irish life big banks? This could be a very busy thread by tomorrow afternoon......

 

[CN624]

Can anyone tell me what happens to short sellers if a bank goes bust?
Are the shares valued at zero?