withdraw your money from RBScot and NatWest- fast!

The shares have fallen because it bought Fortis. Is it insolvent?

Are you selling some kind of betting service?

Lloyds bought HBOS but their shares aren't doing anything like as badly. RBS is standing out like a sore thumb.

It's not insolvent - yet. Most big banks have been worried for ages that either other banks or themselves are insolvent, or about to become so. That's why they've been so loath to lend money to each other.

Certainly not - I'm not selling anything. I've drawn my money out of NatWest. There were two other people in the branch doing exactly the same, for the same reasons. I am spending a few moments trying to help other people.

The message is: any money you've got in the NatWest or Royal Bank of Scotland, draw it out. Especially if it's more than £35,000, but even if it isn't. Advise family members and friends to do the same. What have you got to lose? Your money, that's what. Don't trust the politicians and experts when they say the last thing everyone needs is a run on the banks. What they mean is, the last thing the BANKS need is a run on the banks. They are not going to look after you. You've got to look after yourself. As I said, either arrange to draw your money out in cash. This means 'booking' the cash at the counter. You'll probably be able to withdraw it tomorrow. Or withdraw it by paying it into another account, over the internet or by electronic transfer.

If you're told that the cash won't be available until 2-3 days time, be very suspicious and draw the money out some other way.

Don't have some smartarse (me) telling you on Wednesday or Thursday that "I told you so".

John

Are you shorting?

RBS has neither bought Fortis nor is Fortis insolvent though it has just been bailed out by the governments of Belgium, Holland & Luxembourg.

RBS' connection with Fortis was as a consortium partner in the purchase of ABN Ambro. The latter is now trying to resell its interest in ABN in order to release the capital for more immediate needs. Until and unless it finds a buyer the capital will remain locked in ABN. Even the failure of Fortis would not directly affect the fortunes of ABN.

The failure of ABN would affect the profits of the RBS group but not the fortunes of either the Royal Bank of Scotland or Nat West since these are separate entities within the group. Dividends (not entire profits) from the two banks would be payable to the RBS group but losses of the RBS group could not be defrayed to either or both of the banks.

In the extremely unlikely event of RBS Group becoming insolvent, then the liquidator would be in a position to break it up and put up the two banks for sale as going concerns.

There is therefore no risk to either bank that is not carried in these troubled times by any other bank.

Talking of banking troubles the only banks that have come to any grief thus far (B&B , NR , A&L and HBOS) are all banks that have emerged from the de-mutualisations of building societies and as such were therefore over exposed to the home mortgage market for historical reasons. Nobody other than shareholders has lost a penny as the result of any of them. The FSA compensation scheme has never been activated.

The "Big 4" are not so overexposed and run much bigger and more diverse businesses.

The poster is an idiot having "a bit of a laugh"

Lloyds bought HBOS but their shares aren't doing anything like as badly. RBS is standing out like a sore thumb.

It's not insolvent - yet. Most big banks have been worried for ages that either other banks or themselves are insolvent, or about to become so. That's why they've been so loath to lend money to each other.

Certainly not - I'm not selling anything. I've drawn my money out of NatWest. There were two other people in the branch doing exactly the same, for the same reasons. I am spending a few moments trying to help other people.

The message is: any money you've got in the NatWest or Royal Bank of Scotland, draw it out. Especially if it's more than 35,000, but even if it isn't. Advise family members and friends to do the same. What have you got to lose? Your money, that's what. Don't trust the politicians and experts when they say the last thing everyone needs is a run on the banks. What they mean is, the last thing the BANKS need is a run on the banks. They are not going to look after you. You've got to look after yourself. As I said, either arrange to draw your money out in cash. This means 'booking' the cash at the counter. You'll probably be able to withdraw it tomorrow. Or withdraw it by paying it into another account, over the internet or by electronic transfer.

If you're told that the cash won't be available until 2-3 days time, be very suspicious and draw the money out some other way.

Don't have some smartarse (me) telling you on Wednesday or Thursday that "I told you so".

John Every bank has nervous customers just now. All of their branches and call centres have customers phoning in asking for assurances. Derek.

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According to the media the FSA compensation scheme has been activated to pay off Santander. Are they wrong?

more like snorting...

Thanks for the information. I've just read that Tesco is buying RBS from Tesco Personal Finance. I'm very confused...

OK..thanks.

Tesco is buying the 50% share in Tesco Personal Finance it doesn't already own from RBS.

And I suppose if you are withdrawing it in Scotland, you need to tell people to ask for English notes.

Not much point in exchanging your RBS bank account balance for bits of paper from RBS promising to pay the money on demand?

I have news.

If Scottish bank notes are going to be worth nothing then we're all in serious trouble on a scale that makes the Great Depression look like a sort of shallow dip.

My understanding is that the FSCS has had to borrow about £14bn from the government to cover the immediate transfers of odinary savings accounts to Santander. Probably some of this money will be recovered from B&B when the final reckoning is known. Otherwise payments from the FSCS have to be covered by a levy on the remaining banks, and this potential liability for losses from B&B is yet another factor putting other bank share prices under pressure.

That confirms my impression that there has be no recent real change to the compensation scheme. The FSCS is funded by a levy on the financial institutions which are members, and can, at best, only come up with £4bn per year. It could cover failure of relatively small members, but seems to be largely cosmetic in terms of major failure of multiple major players (and their failure would remove the major contributors to the levy).

In recent weeks I've seen two government ministers, and last night the Prime Minister, asked variations on the question of whether all (or the first £35,000) of deposits are guaranteed in all circumstances, and the answer has not been 'yes'. The current mantra is that they are dealing with issues on a 'case-by-case' basis. But then again, I doubt there is enough money anywhere to cover deposits in a major meltdown.

Toom

I'm still perplexed about why the compensation money was given to Santander at all. Don't they have enough to cover the savings and surely the compensation is only needed if the money is withdrawn?

It seems like Santander have got a very good deal at the expense, ultimatly, of the British people.

The government wants to *immediately* 'transfer' about £20bn of deposits from B&B and doesn't know the exact resources of the company. so the government and FSCS has come up with the money in the interim.

They'd have to offer at least a secure deal; the theory is that the government gets some of the money back from the wind-up of B&B if it has any resources, otherwise if B&B resources were insufficient to funds savers deposits, the FSCS recovers the government's money by a levy on the other banks who fund FSCS. On that basis the ultimate cost is partly paid by the British people who are customers or shareholders of the other banks - but then that is how a levy financial compensation scheme is intended to operate.

Toom

Toom

Thanks for the explanation. It's not really a "gift" as some newspapers seemed to think.

Since Building Societies are also fund the FSCS then customers of those institutions will also bear the cost. This seems unfair IMHO since it wasn't those institutions taking the risks in the first place.

Surely this is the drawback of all compensation schemes of this nature - it isn't the prudent who cause the problems, but they're the ones who end up paying!

As for building societies, please don't tell us that such institutions don't go down the tubes, or are at risk, just because they are "mutual".

What happens about direct debit payments for a bust bank? I know if you don't pay the council tax you can go to jail, or at least damage your credit rating and have the monthly payment facility withdrawn.

Have the bankers robbed the bank? It certainly looks so.

Panic is moving round with no bank being trusted. Labour can afford to let some shareholders lose money but not ordinary depositors. That is one lesson from the 1930s well learnt. Roosevelt introduced deposit guarantees.

Labour can print any number of banknotes necessary. We are not under the gold standard any more. This rumour mongering is the problem. The banks will get losses back soon enough. Their prices will rise and the Government will be delighted since they fear an unstable banking system.

Letting Lehman go was what started the big contagious panic. With hindsight the US govt probably wishes it had not.