Bank Deposit Protection about to vanish?

[RockySpears]

In the UK (and across the EU), there is currently a protection on up to £85,000 of your deposits in a Bank, if it goes under, you are supposed to get all your money back.

  Well the European Central Banks think it is not right that they should honour the money you have in them (savings, current accounts etc etc)

"It is the 'opinion of the European Central Bank' that the deposit protection scheme is no longer necessary:" (see attached, it is all legalise and Bank speak, but you can get an idea of its content here)

  They may let you access an amount they deem necessary for daily living expenses, but other than that "all your monies are belong to us"

When you put your money in a bank, you may think it is yours, but it is not, you "Loaned" it to the Bank and you are now a Creditor, and a very lowly one at that.  If a Bank goes under, you will be just one of a long line of Creditors, many of whom will have a prior claim to yours.

  It is my opinion (and practice) to keep only what is needed day-to-day in a Bank.  They are not giving you anything in return for your handing them your money, but they will keep it by whatever "legal" means (terms and conditions) they can.

  Most here probably have very little in savings, maybe a few £1,000.  The question I ask you is; "Can you afford to lose it?"

Yours,

RS

End of deposit protection.pdf

Edited November 20, 2017 by RockySpears

[Lord Geordie]

Does this mean under European ruling I can just not bother paying my mortgage? After all the bank is just MY creditor yes? Of course I will make a small gesture payment! After all, the money doesn't belong to them now does it? It's mine! I am simply investing it for them. 

[SpringDon]

Seems like a testing the water document rather than a serious proposal. Our guarantee is from the fsc rather than ecb. It seems unwise to even mention such a thing while the euro zone crisis is still unresolved.

[RockySpears]

57 minutes ago, SpringDon said:

Seems like a testing the water document rather than a serious proposal. Our guarantee is from the fsc rather than ecb. It seems unwise to even mention such a thing while the euro zone crisis is still unresolved.

" It seems unwise to even mention such a thing "

One would think so, but they feel themselves to be completely above everything going on.  How must Italians feel?  Their Banking system is almost in meltdown.  Colleagues there tell us they keep very little in the Bank as they feel one day, they will wake up and not be able to use ATMs or get money out over the counter (think Cyprus).

Many seem to have the attitude  "It can't happen to me", but they are so wrong.  If you do not look after you own money, do not expect the Banks to bother.

Yours,

RS

[SxS]

19 hours ago, RockySpears said:

"It is the 'opinion of the European Central Bank' that the deposit protection scheme is no longer necessary:" (see attached, it is all legalise and Bank speak, but you can get an idea of its content here)

The article you linked to was submitted to a blog site of questionable reliability (https://en.wikipedia.org/wiki/Zero_Hedge) by a company focused on selling you physical gold (who would clearly have an interest in encouraging people towards alternative wealth storage options).  It also contains a lot of very selective quotation... 

I find it odd that, were such a proposal really in the works, it has not have received wider media coverage in the past couple of weeks? 

Maybe the document doesn't say that deposit protection schemes are unnecessary and might go?

[RockySpears]

2 hours ago, SxS said:

The article you linked to was submitted to a blog site of questionable reliability (https://en.wikipedia.org/wiki/Zero_Hedge) by a company focused on selling you physical gold (who would clearly have an interest in encouraging people towards alternative wealth storage options).  It also contains a lot of very selective quotation... 

I find it odd that, were such a proposal really in the works, it has not have received wider media coverage in the past couple of weeks? 

Maybe the document doesn't say that deposit protection schemes are unnecessary and might go?

1. "Maybe the document doesn't say that deposit protection schemes are unnecessary and might go?" Read it.

2.  ZeroHedge, you claim, is questionable, using Wikipedia to prove it 

3. "it has not have received wider media coverage" of course not, why would the MSM want to tell people something that they might object to?

4.  "It also contains a lot of very selective quotation... " yes, it' called 'quoting'.  If the quotes are there, what matter that you only pick those ones out?

5. "I find it odd that, were such a proposal really in the works"  Then maybe you need to read more than the BBC and FaceBook.  Try the European Central bank website for yourself then. https://www.ecb.europa.eu/ecb/legal/opinions/html/index.en.html    It is currently Number 1.  "Opinion on revisions to the Union crisis management framework (CON/2017/47), 10.11.2017."

I really had no idea that some Pigeon Watch members might be so Establishment orientated.

Yours,

RS

 

[JohnfromUK]

18 minutes ago, RockySpears said:

I really had no idea that some Pigeon Watch members might be so Establishment orientated.

Yours,

RS

 

Well, there were a number of sites saying that the world was going to be annihilated by a planet (which no one has ever seen) called Niburu on Sunday last weekend.  The "Establishment' assured us it was incorrect.  Most people believed the Establishment - and here we are on Monday all still here, no sign of Niburu!  That doesn't really make us "Establishment orientated"!

In the event that this does come about, I'm sure there will be notice - and it is also likely that the UK will not be in the EU by the end of that notice period.  UK banks (as has been pointed out) are protected by UK Financial Services Compensation Scheme, currently up to a value of £85,000 - the £85,000 figure is I believe set to align with the EU - presumably 100,000 Euros?

Edited November 21, 2017 by JohnfromUK

[Jaymo]

I actually think mr RS never got his NatWest Piggy Bank all those years ago as judging from this and other threads, he really doesn’t like the Banking Industry

 

[Whatmuff]

Who does like the banking industry? Full of corrupt individuals and they're the ones controlling the stock markets and most of the media. Let's just print as much money as possible and get people in as much debt as possible and sit back on millions of pounds of bonuses. If you think that your money is protected in a bank the you're nuts. If the banking system collapses you aren't seeing any of it back. And why would they advertise that in the media? Look what happened with Northern Rock, the slightest whiff of a bank going under and every man and his dog is down the branch trying to get his savings out. 

Edited November 21, 2017 by Whatmuff

[serrac]

https://www.gov.uk/government/consultations/bail-in-powers-implementation-including-draft-secondary-legislation/bail-in-powers-implementation

"Bail-in involves shareholders of a failing institution being divested of their shares, and creditors of the institution having their claims cancelled or reduced to the extent necessary to restore the institution to financial viability."

When they say "creditors", they probably mean you...
How would any of this work if there was a bank deposit protection scheme in place?

[Gordon R]

You are all obviously "Establishment orientated", although I am slightly bemused by this quantum leap in judgement. It is almost Olympic level.

Nonetheless, I like RockySpears' patronising posts. Leave him alone.

 

[Mungler]

Outside of websites flogging gold, it was re-reported on Russia Today so it must be true...

[RockySpears]

15 minutes ago, Gordon R said:

You are all obviously "Establishment orientated", although I am slightly bemused by this quantum leap in judgement. It is almost Olympic level.

Nonetheless, I like RockySpears' patronising posts. Leave him alone.

 

" patronising posts"    I insult no ones intelligence, merely answer points laid out by others.

Further work has re-enforced the ZeroHedge article:  ' The latest wizard wheeze from the ECB is a real sweetie… according to a discussion paper published by the ECB last week on revision the Union’s crisis management framework; if a bank looks wobbly, then: “covered deposits and claims under investor compensation” should be replaced by “discretionary exemptions”.'

 and if you think Bill Blain is some Conspiracy/Fringe type of guy then, good luck.

  I merely point out that people here may think the money they have in the Banks is "safe", well, its not.  I think that warning other PW members that all is not rosy in the world of finance is not a bad thing.

4 hours ago, JohnfromUK said:

Well, there were a number of sites saying that the world was going to be annihilated by a planet (which no one has ever seen) called Niburu on Sunday last weekend.  The "Establishment' assured us it was incorrect.  Most people believed the Establishment - and here we are on Monday all still here, no sign of Niburu!  That doesn't really make us "Establishment orientated"!

In the event that this does come about, I'm sure there will be notice - and it is also likely that the UK will not be in the EU by the end of that notice period.  UK banks (as has been pointed out) are protected by UK Financial Services Compensation Scheme, currently up to a value of £85,000 - the £85,000 figure is I believe set to align with the EU - presumably 100,000 Euros?

"Well, there were a number of sites saying that the world was going to be annihilated by a planet (which no one has ever seen) called Niburu on Sunday last weekend.  The "Establishment' assured us it was incorrect.  Most people believed the Establishment - and here we are on Monday all still here, no sign of Niburu!  That doesn't really make us "Establishment orientated"!"

  Ah, an attempt at arguing that my point is not a good one because some other, totally unrelated point, was not a good one either.  Sad attempt, easily spotted.  I would be surprised if the "Establishment" ever said anything about Niburu, because, like Flat-earthers, its nonsense, in my opinion.

  It is what the Establishment DO NOT say that does the most damage, when they seem not to even acknowledge that there is a problem.

 

Let me try this:  Inflation, good or bad?

  The Bank of England has a mandate to turn £100 of your buying power, into £98 a year later.  It has a target of 2% inflation.  Think about that, it is a mandate to make your money worth less each year by increasing the price of the goods you need to buy!

  The Government (of any colour) wants your money worth less, year on year.  Do you want your money worth less each year?

 Inflation is mentioned everyday pretty much, in the MSM, almost as if it were a good thing. It is not, inflation is bad.  Growth, now that is good (the two should not be confused) that means we have more each year.

  The BoE works to destroy your wealth, that is something you might think on.  There is a reason for it and it is inextricable linked to our money being Debt, but that's another post.

Yours,

RS

 

22 minutes ago, Mungler said:

Outside of websites flogging gold, it was re-reported on Russia Today so it must be true...

  It is on the European Banks website for goodness sake, as well as other financial sites

 

RS

44 minutes ago, Gordon R said:

You are all obviously "Establishment orientated", although I am slightly bemused by this quantum leap in judgement. It is almost Olympic level.

Nonetheless, I like RockySpears' patronising posts. Leave him alone.

 

"You are all obviously"

Nope, never said that ALL were anything at all,

  Keep trying,

 

RS

[Gordon R]

I dangled the bait and you couldn't resist. Your "style" is patronising. There is no need to produce lengthy posts, which merely emphasise my point.

I fully expect a "devastating" put down - no more to be said. You can't help yourself.

It is what the Establishment DO NOT say that does the most damage, when they seem not to even acknowledge that there is a problem. 

To clarify, the Establishment have not said you are patronising.
 

Nope, never said that ALL were anything at all,  Keep trying,

PS - I never actually said that you did. That was my remark about Pigeonwatch members. You really need to pay attention.

Edited November 21, 2017 by Gordon R

[RockySpears]

3 minutes ago, Gordon R said:

I dangled the bait and you couldn't resist. Your "style" is patronising. There is no need to produce lengthy posts, which merely emphasise my point.

I fully expect a "devastating" put down - no more to be said. You can't help yourself.

 

  Do you consider someone  to be "patronising" when explaining things?  Puting forward their opinions and defending their points of view?

  Are we not here, on this planet to learn?

  "Everyday is a school day."

Care to add anything meaningful to the discussion, or are you just here to criticise?

RS

[Gordon R]

In your case, I am here to criticise. You really need to go back through your responses to others and get hold of a dictionary.

Your assertion, that we are here to learn, is mildly musing, as you seem intent on dismissing others' opinions.

 

[Lloyd90]

Not more rubbish bashing the banking industry?! 

This isn’t even going to happen. 

[old'un]

RockySpears

 

Little bit deep for me but are you saying everyone with money in the banking system will be unable to access their money if the banking system goes breasts up?

[JohnfromUK]

2 hours ago, RockySpears said:

  The Bank of England has a mandate to turn £100 of your buying power, into £98 a year later.  It has a target of 2% inflation.  Think about that, it is a mandate to make your money worth less each year by increasing the price of the goods you need to buy!

 

For the majority of the last many years, interest earned has exceeded inflation, so what you write is simple not correct for money held on deposit in a typical interest bearing account. 

The figures are here http://swanlowpark.co.uk/rpi-savings-chart.jsp if you don't believe me (I might after all be "Establishment orientated").

[Gordon R]

I was a bit sceptical reading this direct quotation in the first post:-

 "all your monies are belong to us"

It seemed that English was not the first language for the author. It sounded like the dialogue from a spaghetti western.

[SxS]

Hmmm, getting the impression  you're not a fan of banks, RS? 

Anyway since you brought this one up:

Quote

The latest wizard wheeze from the ECB is a real sweetie… according to a discussion paper published by the ECB last week on revision the Union’s crisis management framework; if a bank looks wobbly, then: “covered deposits and claims under investor compensation” should be replaced by “discretionary exemptions”.'

The actual document goes thus:

Quote

5.3 An effective pre-resolution moratorium needs to have the broadest possible scope in order to allow for a timely reaction to liquidity outflows. The general exception for covered deposits and claims under investor compensation schemes should be replaced by limited discretionary exemptions to be granted by the competent authority in order to retain a degree of flexibility. Under that approach, the competent authority could, for example, allow depositors to withdraw a limited amount of deposits on a daily basis consistent with the level of protection established under the Deposit Guarantee Schemes Directive (DGSD), while taking into account potential liquidity and technical constraints. Certain safeguards to protect the rights of depositors should be put in place, such as a clear communication on when access to deposits would be restored. Finally, possible implications under the DGSD should be assessed, as the pre-resolution moratorium tool would not be useful if it were to be deemed to trigger the unavailability of deposits under the DGSD.

I't's really not quite so scary when you see the full paragraph, or indeed if you know what a pre-resolution moratorium is.  If you don't, it's briefly described in 5.2 of the document you probably didn't read...

I did like this though:

Quote

The BoE works to destroy your wealth, that is something you might think on.  There is a reason for it and it is inextricable linked to our money being Debt, but that's another post.

... oh come on, please don't make us wait for that one!  Let the sheeple know about this Establishment conspiracy! 

[RockySpears]

6 hours ago, Gordon R said:

In your case, I am here to criticise. You really need to go back through your responses to others and get hold of a dictionary.

Your assertion, that we are here to learn, is mildly musing, as you seem intent on dismissing others' opinions.

 

No opinions dismissed, just replied to, often with referenced material.

5 hours ago, old'un said:

RockySpears

 

 

Little bit deep for me but are you saying everyone with money in the banking system will be unable to access their money if the banking system goes breasts up?

Pretty much, yes, it may.  You may look up what happened in Cyprus, one morning, people woke up and the Banks were shut and the ATMs limiting cash withdrawls:  https://news.sky.com/story/cyprus-bank-limits-cash-withdrawals-amid-crisis-10451007

 

SxS - yes, I read it and it does say " while taking into account potential liquidity "  so they get to decide the amounts, noot you.

     "I't's really not quite so scary " Sounds scary to me, they will let me know if I can have MY money, that's nice of them.

     Who said Inflation was a Conspiracy?  It is a fact, 2% is a BoE target, their aim is to destroy your spending power.

 

Gordon R  - you can look that up.  I am sure some here got it.

 

JohnfromUK  - No, I believe you, but you stop at 2000.  Total Inflation since 1970 = 1,412.73%.  But if we look at inflation and savings (from your site)  What happens to £100 invested in 1970?

So you now have £75.20 left of your £100 investment,  Yeah, gotta love the banks.  If you put Your £100 under the mattress, you would have 25% more than if you put it in a Bank.  Really working for us those Banks aren't they?

Oh, and if you pay Tax on your interest (let's face most of us do), guess what?

I'll be kind and only use 10% tax rate, despite that between 1970 and 1991 the rate was NEVER lower than 25% ( I do not know how long Interest has been taxed, but is a long time and using 10% seems fair to me)  I have simply reduced the Savings % by 10%.

 Your £100 turned into £57.74  !!

Looks like between them, the Banks and Gov. got our backs lads and lasses, Yes?

Night night,

RS

[39TDS]

25 minutes ago, RockySpears said:

  If you put Your £100 under the mattress, you would have 25% more than if you put it in a Bank. 

I don't think you understand inflation very well, or how interest works either.

I do appreciate the heads up as per the OP though. 

Edited November 21, 2017 by 39TDS

[grrclark]

8 hours ago, RockySpears said:

Let me try this:  Inflation, good or bad?

  The Bank of England has a mandate to turn £100 of your buying power, into £98 a year later.  It has a target of 2% inflation.  Think about that, it is a mandate to make your money worth less each year by increasing the price of the goods you need to buy!

  The Government (of any colour) wants your money worth less, year on year.  Do you want your money worth less each year?

 Inflation is mentioned everyday pretty much, in the MSM, almost as if it were a good thing. It is not, inflation is bad.  Growth, now that is good (the two should not be confused) that means we have more each year.

  The BoE works to destroy your wealth, that is something you might think on.  There is a reason for it and it is inextricable linked to our money being Debt, but that's another post.

 

It could be another post and perhaps one to start, although I rather suspect it will have little contribution.

Your post is also rather meretricious and a little disingenuous as you take a position of excessive simplicity.

If we had a permanently fixed income  then indeed inflation is a bad thing, it does erode the value of our money, however if we all had a fixed income then even despite the intention (or otherwise) of a central bank, monetary policy could not cause inflation to run higher than market demand would permit.  If we had cost push inflation by producers and there is insufficient money available in the economy it would lead to stagflation and ultimately deflation as excessive supply would exceed demand.

Our purchasing parity, relative to our socioeconomic status and not the numerical value of the currency, has increased as wages have also increased over time and costs of production lessened thanks to things like automation and mechanisation, we have also become rather more inclined toward disposability instead of make do and mend and this leads to demand pull inflation as we all want more things, this of course in turn leads to an increase in wages and the merry cycle continues.

If you consider on a purely inflationary basis on the face value of the currency then yes if a pint of beer cost 50p in 1970 our £1 could have bought two pints where now you are lucky if it buys you a third of a pint, (inflation bad) but we also have very many more £1s in our pocket. (inflation good).

The question is are we relatively better off now then we were in 1970 then yes, the broad socioeconomic consensus will say that we are, but of course the arithmetical answer from a spreadsheet will say our 1970 £100 is now worth less, but of course we all have lots more £100s, so our ability to purchase is greater.

Of course that is way too simple as well.

Even if we were to write way way more than the vast majority of PW would be interested in reading it would still be too simple and also unverifiable.  Even between the major schools of contemporary economics there is surprisingly little consensus on inflation and the control and causes there of, save to say that it has been around since the very inception of exchange of goods.  It is not unique to fiat currency.

There is no magic toolset available to the central bank to control inflation, up or down, other than the crude tool of setting a high base interest rate to attempt to slow inflation, or quantitative easing to try and stimulate inflationary growth.

An honest question, have you been watching or reading David Icke's take on the monetary system?

Edited November 21, 2017 by grrclark

[Gordon R]

In fairness to RockySpears, it is term time and homework doesn't do itself.

Cut and paste, plus quotations inaccurately quoted or from a dodgy source, tables of figures etc. He made the point in the first post - badly. An assumption - incorrect at that, was made within the first two lines.

If he has no time for banks, just what is he suggesting - sticking the money under the bed - better return than a bank - or invest in gold? It is what the smart schoolboys do.