problems with American bank

[Vitamin c]

https://www.bbc.co.uk/news/business-65064378.amp

German bank shares price drop.

[Frnc]

It is possible there will be a global crash like in 2008, or a slower series of smaller collapses. The 2006 cash followed a series of collapses in 2007. Causes and conditions are different from 2007/8. Then it was the sub-prime defaults. Now, there is inflation, increased interest rates, war in Ukraine, and the end of cheap money. When interest rates are low, banks buy government bonds. When interest rates go up, the bonds lose value and the banks are at risk. I believe SVB had more than half of it's money in bonds. People withdrew £ billions from these banks in a few days.

[Frnc]

Bit more. There is a huge amount of the money invested by US banks that has decreased in value to below what they invested. However the US has greater ability to bail out banks than Europe does. Credit Suiss's figure ratios were not much different to the average in Europe. European Central Bank sought to reassure people on Friday as bank stocks fell.
I think in the UK, most savings up to £85,000 are covered by the FSCS.

[jennyjj01]

European Central Bank sought to reassure people on Friday as bank stocks fell.

I think in the UK, most savings up to £85,000 are covered by the FSCS.

"The Financial Services Compensation Scheme protects up to £85,000 of savings per individual, per financial institution (not just per bank), and also covers mortgages, insurance and investments.

In some circumstances, you could be covered for more than £85,000."

I've said before that for us ordinary people, who aren't minted, the problem/risk is not losing our wealth DEPOSITED in the banks, it is losing the wealth INVESTED, either in the banks or in any part of the Stock or Bond market. And that means our private PENSIONS, almost for sure. Falling Bond and Share values put at real risk our chance at a comfortable retirement. INFLATION, linked to all aspects of the economy, is a parallel real risk. So, unless you have more than 85,000 deposited with one institution, IGNORE the bank stocks falling, but prepare for an inevitable loss in future spending power....

A work colleague in his mid 40s had ZERO idea that his state pension will give him a pauper's life and ZERO idea that company pensions could ever go down in value, even below the pittance than he paid in. I found that a lot with previous colleagues of that age, that they all just thought all pensioners are minted and that they would be too. Some of these younger folk didn't have a clue what their state or company pension is forecast to be. When that generation wakes up there will be much wringing of hands and some more political unrest.

CHECK your PENSION FORECAST, now.. Prepare for the last 1/3 of your time here.

[GillyBee]

There are 3 main risks associated with this mess each with different groups most affected and different likelihoods.

• Loss of wealth in the form of pensions/stock/isas etc

- quite likely

• Damage to the economy resulting in job loss as comapnies close and new ones do not start because the banks are unable to fund them

- i.e. a recession and fairly likely

• Collapse of key financial services that make the world go round

This one is less likely but much bigger imapct even for cash users like many on this forum. Your bank account is protected by the FSA but what would happen if VISA, LINK or SWIFT became non-viable? This one is the one that gave Gordon Brown kittens back in 2008. During the Greek crisis in 2012 the "promissory note" system faied - which meant that importers were unable to import anything short of getting on a plane with a suitcaseful of cash.
And can you imagine the scene in your local supermarket if they could not take VISA and there was no word as to when it might be back? (Oh and the cash machines are also out)

[Frnc]

European Central Bank sought to reassure people on Friday as bank stocks fell.

I think in the UK, most savings up to £85,000 are covered by the FSCS.

"The Financial Services Compensation Scheme protects up to £85,000 of savings per individual, per financial institution (not just per bank), and also covers mortgages, insurance and investments.

In some circumstances, you could be covered for more than £85,000."

I've said before that for us ordinary people, who aren't minted, the problem/risk is not losing our wealth DEPOSITED in the banks, it is losing the wealth INVESTED, either in the banks or in any part of the Stock or Bond market. And that means our private PENSIONS, almost for sure. Falling Bond and Share values put at real risk our chance at a comfortable retirement. INFLATION, linked to all aspects of the economy, is a parallel real risk. So, unless you have more than 85,000 deposited with one institution, IGNORE the bank stocks falling, but prepare for an inevitable loss in future spending power....

A work colleague in his mid 40s had ZERO idea that his state pension will give him a pauper's life and ZERO idea that company pensions could ever go down in value, even below the pittance than he paid in. I found that a lot with previous colleagues of that age, that they all just thought all pensioners are minted and that they would be too. Some of these younger folk didn't have a clue what their state or company pension is forecast to be. When that generation wakes up there will be much wringing of hands and some more political unrest.

CHECK your PENSION FORECAST, now.. Prepare for the last 1/3 of your time here.

You mean pensions can go down before you take them I assume? I don't think mine can go down now. They ARE going down in real terms, due to inflation. The main one goes up by 3% each year so in the long term it might not fall. The smaller one is fixed, once you take it out (which I have).
My state pension forecast is almost the max, £185 a week. I've been buying extra years the last few years to cover the period I was contracted out.
The roof could/will eat up another big chunk of my lump sums, but I'd rather that than have to worry about it for years.

[jennyjj01]

ZERO idea that company pensions could ever go down in value, even below the pittance than he paid in.

You mean pensions can go down before you take them I assume?

Correct assumption. Sorry for ambiguity.
Down in monetary value in the time between now and draw-down, especially.
More nuanced, but down in VALUE/spending power even while being drawn. In exceptional circumstances actual payout rates could get cut, if for example a whole pension scheme hit the limits of it's ability to pay out. Pensioners in DrawDown are usually the last to take a hit, but it could happen.

However, you can take comfort that if the worst does happen and your scheme and employer go bust, the Pension Protection Fund should come to your aid.

If you have already retired, your payouts should be fully protected. If you are coming up to retirement, you should get 90 per cent up to a cap of £30,000-plus a year.

There are some caveats to this...

Note the word SHOULD, Not WILL. And your inflation linking might not be honoured by the PPF?

I don't think mine can go down now. They ARE going down in real terms, due to inflation.

You obviously understand that. Some don't. I was more concerned that my 4x YO colleague did not know his un-drawn fund could drop and did not conceive of the impact of inflation.

The main one goes up by 3% each year so in the long term it might not fall. The smaller one is fixed, once you take it out (which I have).

When I took my company pension, inflation linking at CPI was optional. I'm thankful that I opted for it, though CPI is not enough.

My state pension forecast is almost the max, £185 a week. I've been buying extra years the last few years to cover the period I was contracted out.

Same here. You and I are on the same page/script.

The roof could/will eat up another big chunk of my lump sums, but I'd rather that than have to worry about it for years.

A very wise decision, in line with my "Spend it now to beat inflation" suggestion.

[Frnc]

My smaller one did go bust. PPF took it over. The problem with that one is once you take it out, it never goes up.

[Vitamin c]

Who actually believes that if the whole system went bang we would get up to £85k .

I sure don't.

Stress test every thing except intrest rises.....

..

[jansman]

Who actually believes that if the whole system went bang we would get up to £85k .

I sure don't.

Stress test every thing except intrest rises.....

..

I am of a mind that you have the right idea Vitamin C. I don’t trust the financial system ,full stop. When we were very young,we bought our home and were sold a cr*p mortgage. I won’t do details,but basically we paid for fourteen years for nothing. We took a straight repayment version ( which is normal now for obvious reasons) . I worked night and day ,bought and sold precious metals and managed to pay in six years!!!We both got sold cr*p pensions too! We were the generation that was sold this Rip-Off financial cr*p by what were known as ‘Yuppies’ back then.

Frankly,and I apologise if anyone is involved, but two working class kids like us ,were ripped off by a so - called ‘industry’ that are parasites! I won’t continue with that.

Right now,my prepping is sorting all sorts for my wife. My Oncologist told me that she will back me up to gain my insurances ,private pension(s) etc. The pension companies are very ‘regulatory’ when one WANTS one’s own money,but certainly weren’t when TAKING it!

All my wife wants is access to everything as easily accessible cash. And I cannot blame her. Trouble is however, legally earned,hard earned ( unlike financial parasites) is in danger of loss however we look at the situation.