As far as I know it doesn't work like that. It does in some countries like the Netherlands but not here. At least I have never heard of it.
Setting-Off of Debts
In normal circumstances, debts owed to the institution by the depositor will be deducted from the aggregate deposit balance in calculating the compensation payment to be made to the depositor.
Another question I have is if a bank goes bust and the liquidators come in, they distribute the money that's left to who and in what order. Shareholders first or to the banks the banks owe money to? Once the max 20K has been paid out to depositors do they have any right to x cent in the euro from what's left if they had more than 20K deposited.
I have a First Active Offset Mortgage as well as funds on deposit with First Active (offset) and am currently trying to get clarification on this point from them. Unfortunately, I've been trying for the past three weeks to get a reply, but I will persist.
I think this is different. You probably would be able to net the two on an Offset Mortgage as that is the way the accounts are set up but I haven't read the terms and conditions so couldn't be sure.
Thanks. I have read the terms and conditions but can find no reference to bank failure.
Hearing wonderful things about First Active Customer Service recently so good look finding someone to answer the question! All their customer service agents have probably been moved on to arrears collections or something!
Sorry, can you put than in plain English please?I really only know the system from a securitisations point of view and I have never heard this in relation to Irish RMBS deals which you would as it is a risk to bond holders if people can reduce what they owe on a mortgage by what they lost on a deposit. Having said that, I have seen it in Dutch deals but can't remember off hand how exactly it works.
Sorry, can you put than in plain English please?
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