BOOM!!!! Financial Meltdown!

[EJG1980]

Anyone here have any money invested in Icesave? They've gone into receivership in Iceland and now the 300,000 or so UK customers are unable to withdraw any of their money via the Icesave website.

I've got a cash ISA and a fixed rate bond with them so I'm not in a very good mood at the mo! Luckily it's only a total of £19,000 all together so I'm 100% covered by the compensation schemes (and it looks very likely that the bank is going to be declared insolvent) but the thought of all the palaver of claiming it back isn't an enticing one.

While I should get the money back, I don't think the scheme covers any interest that was due, just the original investment, so I'm probably going to lose the interest that was due on the ISA and the bond. I'm also betting that the money that was in the ISA is going to lose its tax free status if I just get all the money I'm owed back as one lump sum.

I've found out this is happening while I'm on holiday in America too! Not exactly what you want while you're meant to be away and relaxing!

Could be worse though. I was watching BBC news on my laptop and they were talking to a couple of people who have well over the £50,000 compensation limit invested with Icesave, so they are well and truly ****ed. I'm keeping my fingers crossed that the Icelandic government will nationalise the bank Northern Rock style, but it doesn't look good at the mo.

[Nijo]

I *think* your interest will be protected as it won't take you over the £50k, but I'm not sure about the ISA status. I don't think anybody is. Worst case is Iceland itself goes bankrupt and you have to reclaim your savings from Russia. Hehe.

[EJG1980]

I'll probably end up with members of the Russian Mafia kicking my door down.

"The Icelanders, they get the money from us, now we get the money from you!"

[ItsThere]

Wow - sorry to hear that HE.

I hate saving as it is so would be gutted to lose any of it!

Hope it all works out in the end for you.

[EJG1980]

Should do hopefully. Like I said, at least I'm fully covered by the compensation scheme so as long as that does it's job I should only lose out on interest and the tax free status of the money in my ISA at worst.

Just watching the BBC news again and apparently the FSCS is still working out the details and don't know if unpaid interest will also be covered yet. As it's an Icelandic bank you get the first £16,000 of compensation from Iceland and then the rest is covered by the UK compensation scheme, but the FSCS are trying to make it transparent to UK investors so we just have to fill in one form that deals with both schemes.

[chaoticjelly]

I have got savings in IceSave too.

The first I'd heard about Iceland's financial problems was last night. I decided that I couldn't afford to lose money by leaving it in there so I actioned a transfer via CHAPS (cost: £30) at about 1:30am.

It should take an hour or two to get into a current account but today of course it hasn't arrived. I think that all transfers made last night have been stopped and will be bounced back into the IceSave account shortly.

The first 20,000 euros is covered by the Icelandic compensation scheme but unfortunatley they apparently only have something like £88 million in the scheme for billions of deposits.

They are looking after their own interests first so maybe anyone with money still in IceSave will lose out. I'm hoping that won't happen though of course.

BTW the schemes do cover the interest I believe, but only up to the maximum limits.

BTW the bank has already been taken over by the Icelandic government.

[chaoticjelly]

Yo, just read that Alastair Darling is going to guarantee all UK IceSave savers money up to £50,000. Since the Icelandic government told him yesterday in no uncertain terms that they were basically not going to honour the compensation agreement he has frozen their UK assets and an official statement will be made at lunchtime.

Hopefully any NTSC'ers with their money in IceSave will get it back.. fingers crossed.

[EJG1980]

Just got up and read about that myself, less worried now than I was before. It might take some time but at least it seems that everyone here in the UK should get their money back. This part:

"The Treasury said that arrangements were being put in place to ensure that all ISA customers of Icesave would continue to benefit from the tax-free status of their accounts."

had me jumping for joy as I'd seen no mention of that up until now. I would have been gutted if five years of being sensible and using up my ISA allowance each year had gone to waste. Although in the circumstances I'd still be happy just to get my money back!

I'm very impressed with Alistair Darling for doing this. It's exactly what you want the government to be there for, stepping in and protecting ordinary people when they're taking a kicking and have nowhere else to turn. Good to see it's not just big banks that get government help.

[vanpeebles]

Looks like most of our councils have their funds there too. Although I don't see how a council should have a savings of 40 million while still raising Council tax.

Looks like Iceland were a **** about it and froze their accounts so the UK has frozen their accounts back using terror laws. If they have 100's of millions of our money then the only option should be a military task force.

[Spatial]

The money was probably part of investments for Pension schemes etc and I would expect they were putting them there because of pressure from Central Government to maximise returns on any cash they were given. Hence the politicians going "leave the councils alone it's not their fault!"

But yeah, it makes you wonder why council's have been bleating on about being cash strapped for some time.

Shares are also on the slide again - as if anyone though the bail out was actually going to work. Question is what next? The government can throw as much money at the problem as it likes but it won't solve the problems of weak fundamentals and idiot bankers that this whole situation was built on.

You just know this is all the tip of a very large iceburg - situations like this with Iceland means we're possibly entering a new phase - one where not only will the banks be wary of lending to each other, but also other countries scared of lending to each other. If all those government gilts / bonds suddenly don't count for toffee then we're all screwed.

[merf]

Iceland was quite unique in lots of ways, the main one being it ceased to operate as a responible international country and basically became a huge state endorsed hedge fund.

Analysts at my place (city investment bank) have been calling it for 2 years or so now and have been quite smug with their 'told you so' attitude the last few days. Just remind the feckers they didn't call Bear, AIG, Lehman, WaMu to shut them up.

[prinnysquad]

Looks like most of our councils have their funds there too. Although I don't see how a council should have a savings of 40 million while still raising Council tax.

Looks like Iceland were a **** about it and froze their accounts so the UK has frozen their accounts back using terror laws. If they have 100's of millions of our money then the only option should be a military task force.

You can lead the assault with your M60!

[vanpeebles]

You can lead the assault with your M60!

Sounds good, about time I got out of this chicken**** outfit!

[dataDave]

The monetary system has limited life left in it, and was originally designed as a 100-year plan - it doesn't matter who is looking after savings...

Ever wondered where money actually comes from (and then ends up) in the first place?

All this blame on Iceland is really uncalled for - blame the people storing money there as we'll be going through the exact same process sooner or later. It really is inevitable. The amount of money in the system can never ever justify the amount of debt that is owed.

Now it's...



PAYBACK TIME!!

Looks like Iceland were a **** about it and froze their accounts so the UK has frozen their accounts back using terror laws. If they have 100's of millions of our money then the only option should be a military task force.

I take it you'd be willing to accept some kind of invasion if we owed a certain country equivalent debts?

[abigsmurf]

http://news.bbc.co.uk/1/hi/business/7662572.stm

WE'RE ALL GONNA DIE! EVERYONE PANIC! SELL SELL SELL!

Or something.

If anyone can accurately predict when the markets will bottom out, there's a fortune to be made here. Just look at HBOS rising 30% in one day after plummeting