Jon Snow's "double risk"

  • chris watson
  • 23/10/08 31/03/10
  • a depositor
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Posted: Fri, 24/10/2008 - 17:28

I see, and agree, with those responses to Jon Snow's "tax dodging/money laundering" line of questioning on Ch4 (23/10), but has anyone, other than Ziggy (who didn't get to finish his response), addressed directly to the media, Snow's "double-risk undertaking" argument?

I refer to Snow's claim that Kaupthing savers expected excessive returns of interest with unrealisitic hopes for having their deposits protected?

For me, Kaupthing Edge product's interest rates were not particulary "out of the box" (and certainly less than those offered by certain Nigerian banks and even the Bank Of Ireland at the time), especially at a time when "cash was king" and Iceland itself had a domestic Interest rate of 15%.

As for protection? Well it was Isle Of Man! Who a few days ago, other perhaps than a professional insider, would have believed one of the world's most significant offshores would be put in such a mess by my own government?

Be interested to have your arguments. We will need to clarify these points in our positionings with the media.

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Good point ... what were/are

  • go mann
  • 10/10/08 31/05/09
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  • Fri, 24/10/2008 - 18:17

Good point ... what were/are MY options? Especially when security is significant.

6.86% with KSIOM ... I had modest exposure, but instant access at a good rate.
6.5% with Bradford & Bingley IOM ... been there, until a week ago!
5.34% with Bank of Scotland International ... 90-day account, but the branch is 10 minutes walk away.
7% at Abbey Jersey ... if I want to be locked in a 3-month bond.
or, really safe ... NR Guernsey, backed by HMG, who would NEVER let you down, who IIRC offered from 1.2% to as good as 2.4%.

At the moment the remains of my IOM money is with LSB in London, earning me a wonderful 3% because I'm not allowed to open a more productive account, as I live off-shore.

Jersey Inflation figures released today are 6.4%, a 16-year high.
Not exactly a difficult decision, is it?


Realistically...

  • cold-dose
  • 11/10/08 31/05/09
  • unspecified
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  • Fri, 24/10/2008 - 19:17

Bank deposit interest rates have had sod all to do with risk (at least outside the multi-million level) , as it wasn't really a factor that customers were looking at.

It was far more based on the overheads/efficiency of the bank, the notice period or lock-in you were prepared to accept on the funds, the level of account holder facilities offered (e.g. cheque books, ATM cards) and associated account charges.

The final factor is the tax that the bank has to pay. Roughly works out at 30% in the UK and 10% in the Isle of Man. So in the Isle of Man they can have a smaller margin to generate the same net profit, meaning they can offer slightly higher rates of interest.


The other aspect that UK

  • occams razor
  • 10/10/08 31/05/09
  • a depositor
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  • Fri, 24/10/2008 - 18:21

The other aspect that UK people always forget is that many expats had their savings in euros or US dollars because they were paid that way, and that's another reason why the ended up at the Isle of Man.
The list of UK-based banks offering currency accounts is very small indeed, even if they would let you open an account as a non-resident, which they won't.


Other aspects

  • mikeinfrance
  • 12/10/08 28/09/09
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  • Fri, 24/10/2008 - 18:59

Quite true,

I have had current accounts in 3 currencies in KSFIOM, originally S&F, since 1990.. paying virtually no interest. I recently looked at other offshore banks for an interest paying deposit account when I accidentally discovered Kaupthing Edge so it was simple just to make an internal transfer; current acct to Edge. KSFIOM also requires only £5K min deposit to keep your accounts open,whereas other banks I seem to recall require £20K.


re - Jon Snow's "double risk"

  • skintagainnow
  • 10/10/08 31/05/09
  • a depositor
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  • Fri, 24/10/2008 - 18:37

I agree re- interest rate, it was nothing out of the ordinary at the time I opened the account, ING were actually offering a higher rate only 0.004% - but couldn't get through their web pages without it "defaulting" on address and got fed up waiting in a que on the telephone - so went for Kaupthing instead - straight through on the web pages, then a couple of phone calls next day - clarification on a few points - sent in requested docs - account open --

then rest is history.

If I'd wanted and had, had a UK address could have received a whopping 0.007% above the instant access Kaupthing rate for a 12>18 month locked in rate with 3 mainland high street building societies.