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Old 28.03.2020, 13:06
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Are your bank deposits exposed to potential bank bail in?

During the last crisis the banks that were deemed too big to fail were bailed out by their governments.
Since then laws have been revised/added across Europe and including Switzerland. As far as I can tell that allows banks that are too big to fail to be "bailed in" by account holders. As I understand it people with holdings in excess of €250,000 or Fr.250,000 (Subject to correction/clarification) may have their deposits commandeered in order to bail in the Banks.

Are you holding in excess of 250,000 in any of your accounts?

https://www.finma.ch/en/~/media/finm...2020.pdf?la=en

Last edited by Horatio Gonzales; 28.03.2020 at 13:07. Reason: Link
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Old 28.03.2020, 13:11
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Re: Are your bank deposits exposed to potential bank bail in?

nope. doesn't make sense to hold large cash balances in bank accounts due to:

-ve interest rates
bail-in risk
opportunity cost
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Old 28.03.2020, 13:51
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Re: Are your bank deposits exposed to potential bank bail in?

fully agree however many have liquidated quite a lot of assets recently to be prepared to buy in so may be have extraordinary amounts on account.
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Old 28.03.2020, 14:03
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Re: Are your bank deposits exposed to potential bank bail in?

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During the last crisis the banks that were deemed too big to fail were bailed out by their governments.
Since then laws have been revised/added across Europe and including Switzerland. As far as I can tell that allows banks that are too big to fail to be "bailed in" by account holders. As I understand it people with holdings in excess of €250,000 or Fr.250,000 (Subject to correction/clarification) may have their deposits commandeered in order to bail in the Banks.

Are you holding in excess of 250,000 in any of your accounts?

https://www.finma.ch/en/~/media/finm...2020.pdf?la=en
And back in the real world - there is no such thing as a "bail in", it is just a polite way of saying your money is gone and you are very unlikely to get any of it back.

It does not really matter if they pay you a cent in the Franc or give you some kind of "bail in" share certificate, the result is the same you don't have any money.

If you have more that the minimum guaranteed about on deposit with a bank then it is probably a good idea to make some adjustments - probably a money market product if you need to have quick access to the cash.
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Old 28.03.2020, 14:07
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Re: Are your bank deposits exposed to potential bank bail in?

call it what you like in the real world or in any other world for that matter the point is they’ll take your money.
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Old 28.03.2020, 16:54
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Re: Are your bank deposits exposed to potential bank bail in?

There is always this risk so one should split the cash in various banks.

Btw there are ultra wealthy persons that have 50m USD in deposits.

Also many many small, medium and large companies have huge bank balances.
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Old 28.03.2020, 17:10
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Re: Are your bank deposits exposed to potential bank bail in?

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Are you holding in excess of 250,000 in any of your accounts
Pah, humbug, what a paltry sum to have on your bank account.

My butler earns more that that in a week
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Old 29.03.2020, 12:07
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Re: Are your bank deposits exposed to potential bank bail in?

Is Postfinance too big to...?
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Old 29.03.2020, 17:11
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Re: Are your bank deposits exposed to potential bank bail in?

Yes I have major concerns about this, to put it mildly. I inherited a good amount of money last year, which is intended to purchase a property and subsidize my retirement in the next year or so. At the moment it's sitting in a savings account with UBS. Obviously wishing I'd already acted on the property purchase but as it will be outside of Switzerland it hasn't been possible yet. Certainly had thought it probably should not be all in one bank, but I am where I am. Anything I can do in the immediate short-term or am I SOL at this point??
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Old 29.03.2020, 17:15
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Re: Are your bank deposits exposed to potential bank bail in?

Where is the 250k figure coming from?

I thought Swiss bank accounts are backed by the government up to 100k per account, everything above that is a loss
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Old 29.03.2020, 17:29
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Re: Are your bank deposits exposed to potential bank bail in?

Is it the same risk as you have it lets say on IB account?
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Old 29.03.2020, 18:13
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Re: Are your bank deposits exposed to potential bank bail in?

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Is it the same risk as you have it lets say on IB account?
I think IB cash is insured up to $250k. Even if IB fails client cash is separated than IB's own capital and money. It will take some time but all the money will be recovered.

The problem is that IB is keeping the cash at various banks. So if the banks have issues then yes potentially it could be a problem.
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Old 29.03.2020, 18:14
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Re: Are your bank deposits exposed to potential bank bail in?

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Yes I have major concerns about this, to put it mildly. I inherited a good amount of money last year, which is intended to purchase a property and subsidize my retirement in the next year or so. At the moment it's sitting in a savings account with UBS. Obviously wishing I'd already acted on the property purchase but as it will be outside of Switzerland it hasn't been possible yet. Certainly had thought it probably should not be all in one bank, but I am where I am. Anything I can do in the immediate short-term or am I SOL at this point??
Open accounts in other banks and move some of it there.
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Old 29.03.2020, 18:30
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Re: Are your bank deposits exposed to potential bank bail in?

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I think IB cash is insured up to $250k. Even if IB fails client cash is separated than IB's own capital and money. It will take some time but all the money will be recovered.

The problem is that IB is keeping the cash at various banks. So if the banks have issues then yes potentially it could be a problem.
And if IB fails I presume I still own stocks/ETF, which I bought through them?
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Old 29.03.2020, 18:35
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Re: Are your bank deposits exposed to potential bank bail in?

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And if IB fails I presume I still own stocks/ETF, which I bought through them?
Yes, I think so. It also depends if they are under IB name or your name. And the depository they are using. In the statement there is all the info that you need. It is a bit more complicated than that but I doubt if IB has issues as it seems they are careful with margin requirements.
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Old 29.03.2020, 18:41
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Re: Are your bank deposits exposed to potential bank bail in?

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Yes, I think so. It also depends if they are under IB name or your name. And the depository they are using. In the statement there is all the info that you need. It is a bit more complicated than that but I doubt if IB has issues as it seems they are careful with margin requirements.
If you had any idea, you would know they would be held in a custody account.
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Old 29.03.2020, 18:41
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Re: Are your bank deposits exposed to potential bank bail in?

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Open accounts in other banks and move some of it there.
Yes seems like the obvious, but there are restrictions on how much you can take from a savings account at once/in a year so not sure if it's feasible.
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Old 29.03.2020, 18:43
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Re: Are your bank deposits exposed to potential bank bail in?

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Yes seems like the obvious, but there are restrictions on how much you can take from a savings account at once/in a year so not sure if it's feasible.
You usually can if you forsake interest, why anyone would hold CASH, that could not be liquidated beats me as the most dumb investment in the world.
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Old 29.03.2020, 18:52
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Re: Are your bank deposits exposed to potential bank bail in?

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You usually can if you forsake interest, why anyone would hold CASH, that could not be liquidated beats me as the most dumb investment in the world.

Thanks. Well it was never supposed to be an "investment" - more of a temporary holding place. And aren't actual investments also looking pretty shaky right now?
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Old 29.03.2020, 18:53
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Re: Are your bank deposits exposed to potential bank bail in?

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If you had any idea, you would know they would be held in a custody account.
Usually, brokers keep the stock under their name though since they need to in order to lend them for short selling.

Some, under clients name. It is not clear as they need flexibility for the stock yielding activities.

I know that IB doesn't really tell you in their statement if your stock is under their name of under your name.
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