EUROS in offshore accounts

[Aurelia]

I have euro savings in the Isle of Man in Lloyds TSB. Can anyone tell me if the euro collapsed and was no longer a currency, would these be changed into sterling or the new currency in Ireland.

 

[newirishman]

I'd say it is not going to happen that the euro as a currency "disappears".
However, if it happens there is two likely scenarios:
- You have a euro account with euros on it that you can exchange to any other currency to whatever exchange rate prevails at the time. The exchange rate might be so low though (if the euro collapses) that you will get nothing pretty much.
- The ECB and EU will come up with rules how a forced exchange into whatever new currencies that replace the EURO will be handled. Anyone's guess what that means.

Again, this is only a very hypothetical scenario anyway.

 

[penury]

I have euro savings in the Isle of Man in Lloyds TSB. Can anyone tell me if the euro collapsed and was no longer a currency, would these be changed into sterling or the new currency in Ireland.

hypothetically speaking - "if" the euro collapse was to happen, I would think you would see warning signs in advance rather than a total overnight collapse.

 

[celebtastic]

I have euro savings in the Isle of Man in Lloyds TSB. Can anyone tell me if the euro collapsed and was no longer a currency, would these be changed into sterling or the new currency in Ireland.

Difficult to say what would happen. Indeed, I'd say the euro is likely to weather the storm, but with Greece likely to be evicted from the euro within months and Spain shortly thereafter - there is an increasing risk of the whole thing unravelling pretty quickly.

Have you considered diversifying your risk by moving some of your holdings into other currencies.

My own family moved from euro to GBP a few months back, when the rate was £1 = €1.16. It has since moved to €1.25, but I cant see it getting much better than that.

Might be worth looking at USD?

 

[penury]

Difficult to say what would happen. Indeed, I'd say the euro is likely to weather the storm, but with Greece likely to be evicted from the euro within months and Spain shortly thereafter - there is an increasing risk of the whole thing unravelling pretty quickly.

Have you considered diversifying your risk by moving some of your holdings into other currencies.

Might be worth looking at USD?

what about Swiss Francs?

 

[Aurelia]

Thanks for all the replies but I am curious why is everyone opening Euro accounts in Germany then, when it is irrelevant where you have your euros.

 

[celebtastic]

It's not entirely irrelevant.

As happened in Argentian when the dollar link broke, there is a good chance that all euro denominated holdings will be forced to transfer to their local currency overnight at a given exchange rate and that currency controls would be introduced.

So euros held in Ireland would drop like a stone as the punt tanks, while the DM would appreciate.

What happens to euros held outside the eurozone??? Who knows ?

This is why its wise to keep some cash in non-euro offshore accounts

 

[penury]

It's not entirely irrelevant.

What happens to euros held outside the eurozone??? Who knows ?

This is why its wise to keep some cash in non-euro offshore accounts

what about a Swiss bank account in Swiss francs - since they are pegging it to the Euro

It would appear that a falling Euro has zero effect on the Swiss franc for now

 

[celebtastic]

Not a bad idea. If the euro breaks up, the Swiss franc is likely to be a "safe haven" and will rapidly appreciate again.

 

[penury]

rather than searching or travelling the world spending money trying to figure out which or what offshore bank to go with, or worrying about the Euro, would it not be easier to just simply open a multi-currency account in one of those larger banks (such as an HSBC - I'm not plugging any particular bank) just a big bank that does multi-currency accounts?

I'm thinking a range of choice from either in euro's, sterling, dollars even Swiss Francs.

 

[celebtastic]

rather than searching or travelling the world spending money trying to figure out which or what offshore bank to go with, or worrying about the Euro, would it not be easier to just simply open a multi-currency account in one of those larger banks (such as an HSBC - I'm not plugging any particular bank) just a big bank that does multi-currency accounts?

I'm thinking a range of choice from either in euro's, sterling, dollars even Swiss Francs.

Lloyds in the Isle of Man offer accounts in a range of currencies, so there should be no need for too much searching:

 

[penury]

once done and the bank as well as the currency of choice is selected or multiple choices - is to carefully look at any fees or service charges associated with an account - it can kill any incentives one might have for doing it.

At the end of the day, any interest on money that covers any FX or fees charged - then I see it as a no brainer.

IMO, you just have to remind yourself at some point there is always a hassle or costs involved doing the offshore and foreign currency banking

 

[ardmacha]

Offshore accounts have possible FX charges, but also income tax implications, both of which can reduce the return. But you may be happy with little return but little chance of devaluation.

 

[penury]

Offshore accounts have possible FX charges, but also income tax implications, both of which can reduce the return. But you may be happy with little return but little chance of devaluation.

maybe I'm missing the point here - I am all for securing the capital that I have, as well as trying to keep even above inflation and any bonus points above that makes me happy.

Ignoring the Fx or euro's possible collapse, why bank offshore at all. Is the Isle of Man, Jersey, the UK, Germany or Switzerland or anywhere else any safer than Ireland?

I suppose a multi currency account could do it - spread across euro's, sterling, dollars and Swiss francs.

I think that I will keep my money under the mattress

 

[Jim2007]

Not a bad idea. If the euro breaks up, the Swiss franc is likely to be a "safe haven" and will rapidly appreciate again.

The SNB will not allow the Franc to appreciate because it has serious repercussions for the Swiss economy, it has it has already acted to force the Euro peg down and as a result foreign depositors saw about 20% wiped of their savings. Unlike other central banks the SNB has the reserves necessary to take on the Euro over the long haul, as it's reported gold reserves alone are valued at over CHF 490b based on 2005 prices!

 

[penury]

The SNB will not allow the Franc to appreciate because it has serious repercussions for the Swiss economy, it has it has already acted to force the Euro peg down and as a result foreign depositors saw about 20% wiped of their savings. Unlike other central banks the SNB has the reserves necessary to take on the Euro over the long haul, as it's reported gold reserves alone are valued at over CHF 490b based on 2005 prices!

then I suppose having one's money in the Swiss franc today could be considered as safe a haven as any - given the fact that its pegged to the euro.

 

[Jim2007]

then I suppose having one's money in the Swiss franc today could be considered as safe a haven as any - given the fact that its pegged to the euro.

It is highly likely that the Franc will be further devalued against the Euro as the Swiss exports continues to be hampered by the strong Franc....

 

[celebtastic]

Ignoring the Fx or euro's possible collapse, why bank offshore at all. Is the Isle of Man, Jersey, the UK, Germany or Switzerland or anywhere else any safer than Ireland?

Two points here:

1) If the eurozone collapses, there will be a massive run on the banks in Ireland and the Irish government is unlikely to be willing or able to bail them out. It is likely that savings in Irish banks will be converted into deperciating Irish punts, and German banks into appreciating DMs.

2) At the same time, there is also likely to be a rush to put money in a safe haven, such as the DM, USD, or GBP which will drive the value of your offshore assets up further against a depreciating Irish punt. The banks in these safe havens are currently well capitalised, and would be even stronger post the eurozone breakup.

I think that I will keep my money under the mattress

To be honest, that's not an unwise option either. At least you know where it is !! A fireproof wall safe might be a safer storage spot though!

 

[celebtastic]

It is highly likely that the Franc will be further devalued against the Euro as the Swiss exports continues to be hampered by the strong Franc....

Really? What do you base that upon?

I'd suggest you take a good read of this excellent post on how to protect yourself against the breakup of the euro:
http://www.askaboutmoney.com/showthread.php?t=163133

 

[mannanger]

I believe some of the members are missing something important. Holding EUROs in a multi-currency account with a non-Eurozone bank appears to me the same as holding Euro in a standard single-currency account. The question is: What will happen to these Euro when the Euro breaks up? Will Euros in an account with a Singapore-, Hong Kong, Swiss bank be changed into SGD, HKD, or SFR or what? If the break-up happens it will heppen over a weekend. Banks and ATMs will probably be closed for a day or two. When then reopen, it will not help to have a multi-currency account in Singapore or whereever because you will not be able to choose the currency of your preference.