4 ms·

As a simple customer of the bank, your money there is ensured up to €100k. If you own stocks, you own them in full you can move them away without issues. So, I

by Loic 10y ago

As a simple customer of the bank, your money there is ensured up to €100k. If you own stocks, you own them in full you can move them away without issues. So, I would say, for most people in a country, if a single bank fails, you have nothing to worry. If many banks fail, this is another story as they insurance pool of the banks may dry out.

dogma1138 10y ago
Insurance takes time to claim, when banks fail the financial services stop functioning, when your payments don't clear you are at considerably greater risk than when a bank is insolvent and can't consolidate it's outstanding accounts with the central or its peering banks. Commerzbank is in almost of a bad shape as DB, same goes for many other banks in the EU and Germany. Greece was a nightmare people don't really understand what was going on and the fact that they couldn't use an ATM, couldn't pay their bills, but at least that was a country wide issue. When you get a similar situation but when one out of X people is left hanging in the wind because their bank has failed it would be considerably worse since there would not be a single unified emergency solution to cover them (in greece people stuck it out, there was even bartering, local stores had credit ledgers etc, GL getting credit from your local supermarket because your DB debit card won't work anymore), and when more banks start to fail because their investors and creditors lose faith and pull out (which is what happened to LB) it would make things worse and worse.
- kbart 10y ago
  "Insurance takes time to claim" It's less than 20 days by law in my country and almost everything is done without depositor's input -- money are transferred to another bank and you simply come there with your ID to take your money in cash or open an account in another bank. I really wouldn't mind to wait a week or two as opposed to billions paid of tax money.
  - blahi 10y ago
    As someone living in a country where one of the biggest banks was robbed to fund hostile takeovers and media propaganda for many years (€3Bn spent on that), I can assure you that the law means jack shit.
    - kbart 10y ago
      During last 5 years 2 banks have went bankrupt in my country (Lithuania), so I can assure that this insurance works really well here, everything went orderly and individual depositors received their money promptly (in about a week if I remember correctly).
      - dogma1138 10y ago
        Lithuania nationalized the shares of it's failing banks, which was in effect a bailout. When Snoras failed your government bought out 100% of it's shares and facilitate the recovery of the deposits. http://www.baltictimes.com/news/articles/30019/ http://www.baltictimes.com/news/articles/30019/ So this isn't a case where a government let a bank fail, this is the traditional bailout mechanism for failed banks - the government buys them out. This is what Latvia did with Parex, what the Netherlands did with SNS and Fortis, what portugal did with BPN and the list goes on and on and on. For the most part no one let a bank fail the same way that the US did with LB, and no one would really want to try that with a commercial high street bank.
        kbart 10y ago
        Ah, my bad then, I wasn't much into details, the titles on most media was literary "Bank X went bankrupt".
  - dogma1138 10y ago
    I had 3 greek colleagues that would disagree.
  - tcoppi 10y ago
    You might not really mind for a week or two. Businesses and people relying on payroll being hit on time certainly do mind, and the longer it gets backed up the greater systemic effects it can have.

by Loic 10y ago

dogma1138 10y ago

Insurance takes time to claim, when banks fail the financial services stop functioning, when your payments don't clear you are at considerably greater risk than when a bank is insolvent and can't consolidate it's outstanding accounts with the central or its peering banks. Commerzbank is in almost of a bad shape as DB, same goes for many other banks in the EU and Germany. Greece was a nightmare people don't really understand what was going on and the fact that they couldn't use an ATM, couldn't pay their bills, but at least that was a country wide issue. When you get a similar situation but when one out of X people is left hanging in the wind because their bank has failed it would be considerably worse since there would not be a single unified emergency solution to cover them (in greece people stuck it out, there was even bartering, local stores had credit ledgers etc, GL getting credit from your local supermarket because your DB debit card won't work anymore), and when more banks start to fail because their investors and creditors lose faith and pull out (which is what happened to LB) it would make things worse and worse.

kbart 10y ago
"Insurance takes time to claim" It's less than 20 days by law in my country and almost everything is done without depositor's input -- money are transferred to another bank and you simply come there with your ID to take your money in cash or open an account in another bank. I really wouldn't mind to wait a week or two as opposed to billions paid of tax money.
- blahi 10y ago
  As someone living in a country where one of the biggest banks was robbed to fund hostile takeovers and media propaganda for many years (€3Bn spent on that), I can assure you that the law means jack shit.
  - kbart 10y ago
    During last 5 years 2 banks have went bankrupt in my country (Lithuania), so I can assure that this insurance works really well here, everything went orderly and individual depositors received their money promptly (in about a week if I remember correctly).
    - dogma1138 10y ago
      Lithuania nationalized the shares of it's failing banks, which was in effect a bailout. When Snoras failed your government bought out 100% of it's shares and facilitate the recovery of the deposits. http://www.baltictimes.com/news/articles/30019/ http://www.baltictimes.com/news/articles/30019/ So this isn't a case where a government let a bank fail, this is the traditional bailout mechanism for failed banks - the government buys them out. This is what Latvia did with Parex, what the Netherlands did with SNS and Fortis, what portugal did with BPN and the list goes on and on and on. For the most part no one let a bank fail the same way that the US did with LB, and no one would really want to try that with a commercial high street bank.
      - kbart 10y ago
        Ah, my bad then, I wasn't much into details, the titles on most media was literary "Bank X went bankrupt".
- dogma1138 10y ago
  I had 3 greek colleagues that would disagree.
- tcoppi 10y ago
  You might not really mind for a week or two. Businesses and people relying on payroll being hit on time certainly do mind, and the longer it gets backed up the greater systemic effects it can have.