What are your thoughts, on how a default, will affect our hard earned deposits ?

[Jim2007]

a more likely scenario ( although still unlikely ) is in the event of ireland withdrawing from the euro , all savings held in this state would adopt the value of our new currency

A rather simplistic view I would suggest! In the unlikely event of such a thing happening, I would suggest that you can also expect other Euro countries such as Germany taking steps to protect their currency by requiring all non resident deposits in their banks be converted as well, otherwise the flight of capital we hear about would a major impact on their currency.

Jim.

 

[damson]

Originally Posted by farmerette
a more likely scenario ( although still unlikely ) is in the event of ireland withdrawing from the euro , all savings held in this state would adopt the value of our new currency

A rather simplistic view I would suggest! In the unlikely event of such a thing happening, I would suggest that you can also expect other Euro countries such as Germany taking steps to protect their currency by requiring all non resident deposits in their banks be converted as well, otherwise the flight of capital we hear about would a major impact on their currency.

Jim.

You think that if Ireland withdraws from the euro, a bank in Germany would seek to identify all accounts with Irish-resident depositors, and selectively convert them to an punt nua - even though the German currency remains the euro? Or am I misinterpreting you?
I don't see how that would work. Once the money's in a euro account in the German bank, why would it make a difference to them what the account holder's home currency is doing? Surely when the money was lodged the Irish bank would have settled with the German bank in whatever currency and rate prevailed at the time, and the Irish resident's euros in the German bank are now no different from euros deposited by a German resident?

 

[farmerette]

You think that if Ireland withdraws from the euro, a bank in Germany would seek to identify all accounts with Irish-resident depositors, and selectively convert them to an punt nua - even though the German currency remains the euro? Or am I misinterpreting you?
I don't see how that would work. Once the money's in a euro account in the German bank, why would it make a difference to them what the account holder's home currency is doing? Surely when the money was lodged the Irish bank would have settled with the German bank in whatever currency and rate prevailed at the time, and the Irish resident's euros in the German bank are now no different from euros deposited by a German resident?

yes , you are misinterpretating me , my point about people moving thier savings to banks outside the state was meant to illustrate the possibility of accounts held in this state adopting a new currency

some other posters seem to think that in the event of a euro exit for ireland , countrys like germany would refuse to recognise irish deposit holders ( who had accounts in german banks ) and would duly convert those euro funds to punt nua , its an interesting theory , if people knew that was going to happen , i suspect most would simply stick all thier savings in the likes lf rabbo direct in ireland , while your money would convert to punt nua , at least it would be safe , unlike in bank of ireland or aib

 

[damson]

Hi farmerette,

Sorry - I wasn't clear in my previous post - I was trying to clarify what Jim2007 had said, not you.

I understand your original point, but it seemed to me from Jim2007's response to you that he feels Irish deposits in German banks mightn't be any safer from an Irish currency change than Irish deposits in Irish banks. That's what I wanted to clarify, because I wouldn't have thought it likely.

 

[farmerette]

Hi farmerette,

Sorry - I wasn't clear in my previous post - I was trying to clarify what Jim2007 had said, not you.

I understand your original point, but it seemed to me from Jim2007's response to you that he feels Irish deposits in German banks mightn't be any safer from an Irish currency change than Irish deposits in Irish banks. That's what I wanted to clarify, because I wouldn't have thought it likely.

it seems questionable to me that the german state would have the right to discriminate against foreign deposit holders in german banks

 

[Gervan]

I can see now why some people are keeping cash in a safe at home! If Ireland does move to another currency, we should be able to convert home-saved-euro at advantageous rates into nua punta, so as to have cash for daily life. The banks couldn't say "this is Irish euro, not German euro, so we'll give you a lower rate".

 

[Gervan]

Exactly. A quick trip abroad, change the euro in France, and return with nua punta x 3.

 

[dandy]

Hi all, just wondering what kind off timeframe are we talking about if as most people here seem to think is inevitable Ireland will default, surely the bailout money should get us through this year at least.

 

[Lightning]

Hi all, just wondering what kind off timeframe are we talking about if as most people here seem to think is inevitable Ireland will default, surely the bailout money should get us through this year at least.

The Economist said they think it will happen in 2013.

 

[Jim2007]

I understand your original point, but it seemed to me from Jim2007's response to you that he feels Irish deposits in German banks mightn't be any safer from an Irish currency change than Irish deposits in Irish banks. That's what I wanted to clarify, because I wouldn't have thought it likely.

it seems questionable to me that the german state would have the right to discriminate against foreign deposit holders in german banks

I can see now why some people are keeping cash in a safe at home! If Ireland does move to another currency, we should be able to convert home-saved-euro at advantageous rates into nua punta, so as to have cash for daily life. The banks couldn't say "this is Irish euro, not German euro, so we'll give you a lower rate".

The thing to remember is that there is no mechanism for dealing with a country trying to exit the Euro, it was always seen as a one way ticket and everything was organised on that basis.

The idea of a country leaving the Euro, for whatever reason would have a major impact on the currency itself and on those remaining in it, so we should be surprised if they make it difficult for us to do so.

In any breakup the flight of capital will have to addressed, otherwise the whole exercise would be pointless! So from a practical point of view, my guess would be that it will something along the lines of deposits in Irish banks plus non resident accounts....

Jim.