Security of French Banks

[WJT]

I know the amount guaranteed for each individual in each UK bank account is £35,000. Does anyone know what the amount if any is guaranteed by the French government in a French bank account?

[BJSLIV]

Looks like the answer is 70,000 Euros per person per bank.

http://www.orange.fr/bin/frame.cgi?u=http%3A//finances.orange.fr/Argent-au-quotidien/Credit-banque/Articles/faillite-de-votre-banque-votre-argent-est-protege.html

[5-element]

Yes, 70,000 euros was the figure quoted on FR2 news yesterday evening.

[WJT]

Thank you very much for the information.

[WJT]

I have just had another thought, albeit a negative one.[:)] I am sure it would be the case but I wonder if the 70k mentioned would also apply to us foreign nationals as well as French citizens. I would certainly assume that would be the case in the UK but with everything the French government has done recently such as the Health changes, just wanted to be sure. It appears it could potentially be an interesting loophole.

[Sunday Driver]

No indication that foreign nationals per se are excluded from the scheme.

You can find a list of exclusions on the official [url=http://www.garantiedesdepots.fr/spip/index.php3?lang=fr] Fonds de Garantie des Depots[/url] website.  There's a full English version there as well.....

 

 

[WJT]

Thank you Sunday Driver for the link. I don't see where it is mentioned so hopefully that could never be the case. I wonder which bank the speculaters will pick on next after HSBOS.

[Logan]

[quote user="WJT"]Thank you Sunday Driver for the link. I don't see where it is mentioned so hopefully that could never be the case. I wonder which bank the speculaters will pick on next after HSBOS.[/quote]

HBOS is not being picked on by "speculators". If you were a shareholder in the bank I am sure you would also sell. HBOS in part had a similar business model to Northern Rock. ie: They raised their funds from the market to lend. That source has dried up so the bank cannot make any money. Shareholders take fright so the value of the bank drops. It has nothing to do with speculators. I mean would you want your pension fund to lose money? This crisis is in my view the market sorting the wheat from the chaff. I believe the banking system will eventually benefit from a return to a more traditional model.

[WJT]

Logan, I really know very little about these sorts of things but was listening on the news earlier and they were stating that the reason for HBOS shares particularly yesterday with the trading were mostly down to speculators shorting. They said that there are a group of speculators in the city that collaborate and agree up front what shares they are going to short and can control the markets to a certain degree.

The US have taken some steps very recently and are looking at putting in place some regulations to control this sort of thing because in the end in the instance of the banks it is the taxpayers that pay the price and the speculators have very little risk because they know the government is there to help the banks.

The commentator categorically said that HBOS was targeted and they would most probably move on to another bank next, in the meantime making fortunes. As I said I don't know that much about it but it does sound plausible and familiar to what has happened to oil prices. I am not one for government intervention or control but I certainly see where there is a real need for more regulation in the financial industry.

[Logan]

HBOS has been shorted but that in my view is only part of the picture. At the heart of it's problems was the business model it had adopted. Shorting only works when confidence drops. Apart from being unable to raise capital on the interbank market it could not sell on it's mortgage backed assets. Profits were set to plunge and institutional investors consequently run for cover.

When the City smells blood the beast is doomed.

It looks as if Lloyds TSB will save the day but on the cheap relatively.

We live in momentous times.

[The Riff-Raff Element]

For once in

my life I'm with Logan. Shorting stock is per se no more speculative than going long – i.e. buying

the shares in the belief that they are going to go up in price. The only difference

is that everyone thinks that they’re winning when the price of a stock goes up.

If some naughty people colluded to manipulate a stock price then that is

illegal and they should be punished. In the UK this will probably mean 48 hours

detention in the Dorchester with full access to the minibar, but they might get

extradited to the US (I believe HBOS has a US listing?) where of course there

is a much more relaxed attitude to torture - sorry, "enhanced interrogation

techniques” -and they could get 930 years to life.

 

Frankly

compared to the blood-letting that is still to come in the US (anyone own

Morgan Stanley or Goldman Sachs?) Europe is

getting off lightly: our comparative conservatism with respect to credit

default derivatives and other perverse inventions of the twisted Wall Street

mind has probably saved our bacon and, like Scrooge, we still have some money

left with which to be mean. Particularly since if the above follow Lehman into

the abyss they’ll pull a whole pile of awkward transactions in with them and the counterparties can wriggle out.

 

That doesn’t

of course mean that we are going to get off scot free, and it is very sensible

to spread risk, but personally, now that HBOS and Northern Rock are off the

block, I don’t see there are many other vulnerable institutions in Europe.

 

Sometimes

being dull, unimaginative and traditional is good.

[Polremy]

your last sentence makes me feel much better about myself. thanks

[fivecats]

It is true that european banks have escaped lightly for the moment from the american banking fallout, however there is a second bigger more toxic instrument that all banks are trading in, which if the world economy goes into deep recession could bring down the banking system. This is why the fed saved Aig and not lehman brothers

The instrument that banks are increasingly trading is the credit derivative. This article better explains the problem than I can do - http://news.goldseek.com/GoldSeek/1221672153.php

If you take a look for instance at Hsbc's 2008 Interim report under the note for derivatives you will that the trading in this instrument has more than qaudrupled in a year.

Lets keep our fingers crossed that this does not happen.

[Kitty]

[quote user="Logan"]  This crisis is in my view the market sorting the wheat from the chaff. I believe the banking system will eventually benefit from a return to a more traditional model.[/quote]

I second that.

[Quillan]

[quote user="WJT"]

I know the amount guaranteed for each individual in each UK bank account is £35,000. Does anyone know what the amount if any is guaranteed by the French government in a French bank account?

[/quote]

I was looking for the other thread on the subject of UK banks. I was watching BBC Morning News today (19/09/08) where they explained its per banking group i.e. HBOS owns several banks and building societies, if you have accounts at two or more of the banks or building societies it owns you will only get one payment of £35k. It would seem that to protect your savings you need to know who owns what and only put £35k in to each group.

[Logan]

So Lloyds TSB have been able to buy HBOS today at a very cheap price. Great news if you happen to be a Lloyds shareholder. Last year HBOS shares were worth £11 each! Also the regulators would never have allowed this take over in normal times. It creates a huge banking monopoly with enormous retail power. That will eventually adversely effect the consumer by creating restrictive competition. Similar to the French model and the dominance of CA.

Other UK banks are upset.

http://www.independent.co.uk/news/business/news/rival-banks-cry-foul-at-lloyds-dominance-after-16312bn-hbos-deal-934379.html