Who remembers the Icelandic banks?

[Simpo Two]

I'd forgotten about this: https://is.wikipedia.org/wiki/Icesave

(you may need the Translate plugin!)

[dave_xyz]

Yes, I remember Icesave. I had a four figure sum in one of their ISA's when they failed in 2008 - fortunately the FSCS scheme saw me good in the end.

[boxst]

I had money on Kaupthingnedge (definitely spelt wrong) and they went bankrupt. Thankfully ING bought them and took on all their debt.

[MisanoPayments]

A uni friend had money deposited with IceSave, I remember that.

I also well remember the collapse of Lehman - work was very busy that day in particular - I was often having to re-quote clients two/three times per call as the markets were moving so much, politely asking them to decide quickly if they wanted to trade or not as the phones were buzzing all day. The company directors got everyone a pizza to ensure bums remained on seats throughout the day!

[Derek Chevalier]

Yes, the CDS spreads were showing signs of distress, yet they carried on appearing on Best Buy lists for months afterwards.

https://www.fnlondon.com/articles/icelandic-banks-...

[bitchstewie]

dave_xyz said:

Yes, I remember Icesave. I had a four figure sum in one of their ISA's when they failed in 2008 - fortunately the FSCS scheme saw me good in the end.

Same.

A very good reminder to keep in mind if something looks too good to be true there's probably a reason for it.

[dontlookdown]

I seem to recall that a number of local authorities lost substantial sums when the Icelandic banks went pop.

[chip*]

dontlookdown said:

I seem to recall that a number of local authorities lost substantial sums when the Icelandic banks went pop.

Local authorities / Treasury department staffs ain't exactly the pinnacle of the financial world i.e. look up Hammersmith & Fulham / interest rate swaps case where >100 LA's entered into a one way bet on interest rate against their borrowing. The LA's only won on a technicality / admitting they were dumb fks.


Link for those too young to remember this case
http://lada.debtresistance.uk/the-ghosts-of-hammer...

Edited by chip* on Monday 13th January 14:48

[Granadier]

I remember when Iceland Foods was owned by a couple of Icelandic banks - I thought that was satisfyingly appropriate...

[Simpo Two]

It seems a good way for a struggling country to attract lots of cash, then pass much of the debt to other countries/people when the wheels come off.

Maybe Reeves should try it!

[MKnight702]

Simpo Two said:

It seems a good way for a struggling country to attract lots of cash, then pass much of the debt to other countries/people when the wheels come off.

Maybe Reeves should try it!

Have you been reading her notebook again?

[bitchstewie]

For me it wasn't a four figure sum it was five which was my then life savings.

Scary as hell quite honestly until the FSCS made clear they would cover it.

Another key takeaway was that I think to some degree it was fair as a normal saver to have assumed that if a bank can advertise in the UK for UK deposits that you're not going to suddenly find out when it goes belly up that you're covered by Icelandic (or wherever) regulations.

It certainly has me a lot warier about many of these small banks I've never heard of offering market leading APRs.

[outnumbered]

We had more or less the FSCS maximum in IceSave. I was actually surprised by how quickly we were paid out after it collapsed, only about 2-3 weeks from memory.

The more interesting question is probably: What is today's equivalent of the Icelandic banks ?

[Eric Mc]

One of the Icelandic bank chairmen bought West Ham United.

[Panamax]

outnumbered said:

We had more or less the FSCS maximum in IceSave. I was actually surprised by how quickly we were paid out after it collapsed, only about 2-3 weeks from memory.

I find that hard to believe. Mine took many months.

And "lest ye forget" the FSCS guarantee only covers deposits and not the interest accrued and not yet paid or interest still accruing, so many months of zero return.

[deggles]

Yep I had a fair whack in IceSave at the time. IIRC it wasn’t a straightforward FSCS bailout. I’m paraphrasing, but Iceland basically told foreign depositors to go fk themselves and only bailed out domestic accounts. Cue much international aggro as UK gov pulled all sorts of tactics including anti-terror legislation to seize Icelandic assets. I think we (UK) eventually recovered most of the ‘debt’ through the courts.

I went on to put my savings in Northern Rock. That went well...

[Simpo Two]

deggles said:

I’m paraphrasing, but Iceland basically told foreign depositors to go fk themselves and only bailed out domestic accounts. Cue much international aggro as UK gov pulled all sorts of tactics including anti-terror legislation to seize Icelandic assets. I think we (UK) eventually recovered most of the ‘debt’ through the courts.

From the original link:

'As a result, an intergovernmental dispute developed between Iceland on the one hand and the United Kingdom and the Netherlands on the other regarding whether and to what extent Iceland was responsible for the invoices and therefore also responsible for repayment to the United Kingdom and the Netherlands. Three attempts were made to negotiate the issue. For the first time, Alþingi approved a repayment agreement with reservations that the British and Dutch did not agree to. The second time, the parliament approved a repayment agreement that the president of Iceland , Ólafur Ragnar Grímsson , refused to confirm and referred to a referendum , where the agreement was rejected by a large majority. The third agreement on Icesave followed a similar path and was rejected in a referendum on April 9, 2011.

When it became clear that the negotiation process had been exhausted, the EFTA supervisory body began preparing a lawsuit before the EFTA Court due to Iceland's alleged violations of its obligations under the agreement on the European Economic Area . The verdict was handed down on January 28, 2013, with Iceland acquitted of all counts of the case.'

Of course if the UK DID do a similar thing and end up owing foreigners billions, we'd immediately raise taxes to pay them all out



All this talks of icebergs and rocks makes me think I might start my own bank. I shall call it Titanic Bank.

[ChocolateFrog]

outnumbered said:

The more interesting question is probably: What is today's equivalent of the Icelandic banks ?

Dodgy crypto probably.

Hawk Tuah coin anybody?

[LeoSayer]

boxst said:

I had money on Kaupthingnedge (definitely spelt wrong) and they went bankrupt. Thankfully ING bought them and took on all their debt.

I had all our savings there and whilst it was concerning it was lower on my list of things to worry about at the time because I knew the bank was FSCS protected.

Other concerns at the time was our large mortgage fixed for 3 years at 6%, ISA investments that had dropped 40% and to top this off, my employer looking precarious due to liquidity problems with our bank.

This time really taught me a lot about managing risk around personal finances. It was a scary time when it felt like the whole financial system would collapse.

[dave_xyz]

Panamax said:

outnumbered said:

We had more or less the FSCS maximum in IceSave. I was actually surprised by how quickly we were paid out after it collapsed, only about 2-3 weeks from memory.

I find that hard to believe. Mine took many months.

I remember being surprised at the speed as well. According the dates on the archived emails I have from the FSCS, it was about 4 weeks from initial contact by them to payment hitting my account - and the latter was approx. 2 months after the collapse.