Are our deposits safe now?

[looteht]

Back around 2011 /2012 there was a lot of talk of the dangers of a Euro breakup or currency devaluing.

Is this still a risk or are we past that.

Is everything under 100k in banks now safe?

 

[Lightning]

The risk of a Euro-zone breakup has certainly reduced significantly.

Deposits up to 100,000 EUR are protected by different deposit insurance schemes.

 

[dub_nerd]

I'd say the risk of breakup has receded but is far from negligible. It boils down to whether the political will for the centre to prop up the periphery is maintained. Since that is dependent on national governments and their electorates, and not just on some Brussels or Frankfurt bureaucracy, the continuing danger is very real indeed.

Meanwhile, Eurozone banks have very significant problems. The Irish ones in particular have billions of euro in arrears of over 180 days, and that's only counting residential mortgages, not buy-to-lets, SME loans, or anything else. The State can't afford another bailout, either financially or politically, and there is another round of ECB stress tests looming.

 

[PMU]

I'd say the risk of breakup has receded but is far from negligible. .

Agreed.
Rather than speculate on the future it’s always interesting to look at what key players are doing. The National Pensions Reserve Fund has a target allocation to cash of 1% , but their Q1 2014 portfolio update shows an actual allocation to cash of 39.7% and a 0% allocation to euro government bonds (and not the target allocation of 6%) .

So they could be holding a lot of cash due to a lack of identifiable investment opportunities, or they have a real need for liquidity, or . . . .

 

[Sunny]

Agreed.
Rather than speculate on the future it’s always interesting to look at what key players are doing. The National Pensions Reserve Fund has a target allocation to cash of 1% , but their Q1 2014 portfolio update shows an actual allocation to cash of 39.7% and a 0% allocation to euro government bonds (and not the target allocation of 6%) .

So they could be holding a lot of cash due to a lack of identifiable investment opportunities, or they have a real need for liquidity, or . . . .

Sorry to burst the great conspiracy theory but the NPRF is going to become the Ireland Strategic Investment Fund whose objective is to invest in economic projects in Ireland on a commerical basis. The 37% weighting of cash in the discretionary portfolio is simply the fund moving away from risky assets and making sure that the funds are in place for investment into Ireland. They are not making some grand statement on the future of the Euro.