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Old 16.06.2008, 16:53
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New Online Bank .... more %

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Icelandic Bank Kaupthing have newly entered the Swiss market with some online banking offers in Euro (5%) & CHF (4%)

Kaupthing Edge

would be interested to know what our in-house finance bods think of this ?
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Old 16.06.2008, 17:02
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Re: New Online Bank .... more %

well the EBK knows them. That's reassuring
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Old 16.06.2008, 17:11
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Re: New Online Bank .... more %

Icenlandic banks are desperate for foreign currencies. But given the situation of their home market (potential economic implosion in the short run) the cost of funding has become so high, that they are resorting to retail banking to capture funds...
that's why they are entering foreign markets with super interesting rates...
in a few words, I'm not puttng a penny of my savings with them
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Old 16.06.2008, 17:17
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Re: New Online Bank .... more %

4% on CHF is pretty damn good.

However, there are plenty of concerns over the whole Icelandic financial system, so beware.

In the UK you are covered for £35,000 worth of savings by the government mandated FSCS so they are a bet worth taking. I would check if there is some sort of similar Swiss guarantee before depositing a large amount of money.

If anyone has any good sources for the best CHF savings rates, please post.
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Old 16.06.2008, 17:21
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Re: New Online Bank .... more %

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4% on CHF is pretty damn good.

However, there are plenty of concerns over the whole Icelandic financial system, so beware.

In the UK you are covered for £35,000 worth of savings by the government mandated FSCS so they are a bet worth taking. I would check if there is some sort of similar Swiss guarantee before depositing a large amount of money.

If anyone has any good sources for the best CHF savings rates, please post.
did have a look at this Gav, for the reasons that you give on the Icelandic market :

Quote:
The Geneva branch of Kaupthing Bank Luxembourg S.A. is a member of the association known as the “Garantie des dépôts des banques et négociants en valeurs mobilières suisses” [“Deposit Protection of Swiss Banks and Securities Dealers”].
English copy in PDF of the einlagsicherung is here

I am very tempted by the Euro account, 5% til September then 4% ongoing.
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Old 16.06.2008, 17:26
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In the UK you are covered for £35,000 worth of savings by the government mandated FSCS so they are a bet worth taking. I would check if there is some sort of similar Swiss guarantee before depositing a large amount of money.

as far as I know, in CH the first CHF 30'000 of your account are covered
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Old 16.06.2008, 17:30
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as far as I know, in CH the first CHF 30'000 of your account are covered
that is the einlagensicherung in the above post
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Old 16.06.2008, 17:37
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I am very tempted by the Euro account, 5% til September then 4% ongoing.
GMAC Canada 6.71 maturing this september, floater trading below par

Or, if you're real cheeky
GMAC 4.75 maturing September of 09, trading at 90 cents to the euro...
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Old 16.06.2008, 17:46
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GMAC Canada 6.71 maturing this september, floater trading below par

Or, if you're real cheeky
GMAC 4.75 maturing September of 09, trading at 90 cents to the euro...
& that is ? .... in laymans terms
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Old 16.06.2008, 17:50
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& that is ? .... in laymans terms
Two bonds that you could buy. First one pays 6.71% (equivalent annual basis) and is redeemed at par this september.

Second one pays four and three quarters (also annual) and is redeemed September next year (but as you buy it at 90% it's a good yield...).

They are riskier than the general run off the mill bond, but then so is Kaupthing
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Old 16.06.2008, 18:11
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Re: New Online Bank .... more %

Ah the good old GM 4.75 Sep 09. I remember that one from when I used to trade REPO. Is it a GMAC or a GM bond?
I'll though in the FCE FRN 09/09 in Euros into the mix as well. That should offer a nice rate or return. The issuer is Ford Bank Europe PLC. I have no Bloomberg right now. Shorrick can u have a look and see where it is trading?
I can't remember a GMAC FRN SEP 09 in EUR. Is it a big issue? Can u buy it in retail size or is it an institutional bond?
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Old 16.06.2008, 19:13
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I can't remember a GMAC FRN SEP 09 in EUR. Is it a big issue? Can u buy it in retail size or is it an institutional bond?
09 is fixed rate. It's big, liquid and you can buy it in thousands. Away from Bloomie for the night. the floater is 08.

Both are GMAC, 08 is GMAC Canada.
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Old 17.06.2008, 01:28
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09 is fixed rate. It's big, liquid and you can buy it in thousands. Away from Bloomie for the night. the floater is 08.

Both are GMAC, 08 is GMAC Canada.
Aren't GMAC the originators of dodgy sub-prime loans that are threatening B&Bs bottom line over the coming years?
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Old 17.06.2008, 08:08
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Re: New Online Bank .... more %

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I am very tempted by the Euro account, 5% til September then 4% ongoing.
Our UBS Euro account was 3.5% until January (since closed it).

The CHF account at 4% - very tempting. That's more than my mortgage
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Old 23.06.2008, 18:38
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Re: New Online Bank .... more %

As of 1st July I will have completed transferring from Kaupthing Bank Luxembourg to their branch in Geneva to manage the Cash Department and I have had months of involvement in this new and exciting product. Without making it too long here is some brief info -

Months of research and data was obtained before deciding on such competitive rates. Do not be misguided by the current market in Iceland it has thus far not impacted the new Savings Scheme(s). Kaupthing Edge was designed to be competitive in the countries it now holds its branches in i.e. Luxembourg and Switzerland. The results have been very positive.

Just to confirm, dealers will enjoy privileged status under Swiss law in cases of bankruptcy, up to CHF 30,000 per person.

All other details can be found on www.kaupthingedge.ch

or just ask here.

Michelle
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Old 23.06.2008, 19:19
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Re: New Online Bank .... more %

Just to give bit more color on Icelandic banks, the credit default swap (insurance against bankruptcy) is trading at 5-6%. In other words, the fair price for lending them money is 5% higher than benchmark rates (Libor etc).

Iceland is going through some tough times with domestic banking sector massively stressed. Iceland Krona has depreciated about 40% in last 12 months (3% just today) against Euro.

But with Swiss deposit guarantee, 30k is not bad. Above that I will be reluctant.
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Old 24.06.2008, 20:39
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Re: New Online Bank .... more %

Yes but someone (Goldtop perhaps or Richard) once explained that the 30k is a max. If one bank (or more) go broke, there is a maximum amount given to clients per bank, so the maximum is divided by the nr of clients and if you are lucky, you get to 30k. I guess if only this Icelandic bank fails, one would hope the nr of clients stays below the threshold.

The full details of the original post I can look up later if wanted.
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Old 24.06.2008, 22:46
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Yes but someone (Goldtop perhaps or Richard) once explained that the 30k is a max. If one bank (or more) go broke, there is a maximum amount given to clients per bank, so the maximum is divided by the nr of clients and if you are lucky, you get to 30k. I guess if only this Icelandic bank fails, one would hope the nr of clients stays below the threshold.

The full details of the original post I can look up later if wanted.
Cannot imagine that so many depositors would open accounts at Kaupthing. Very unlikely that Kaupthing will exhaust the insurance pool. Ironically, the big banks are more likely to crash the deposit protection system. My guess is that 30k at Kaupthing is safe.
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Old 25.06.2008, 00:06
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Re: New Online Bank .... more %

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Just to give bit more color on Icelandic banks, the credit default swap (insurance against bankruptcy) is trading at 5-6%. In other words, the fair price for lending them money is 5% higher than benchmark rates (Libor etc).
Kind of, but not quite, but close enough for your man in the street I guess.

If there is one thing 2007-08 should have taught us it is that the price of the CDS is an indicator of the price of the CDS and not the fair lending rate, especially at the short end. Otherwise I would not have been able to trade basis (bond yield over LIBOR vs CDS) on Lehmans 5yr Euro paper at +60bp in November 2007 which I did.
The term LCDS (referenced specifically to bank loans rather than bonds) was the talk of the day in 2007. I am not sure to what extent this market has developed, but that would be a better market indication of the fair rate to lend money.

It is also worth noting CDS is a market rate, which is not the same as the 'theoretical correct price' for the risk. When the Itraxx (which is to CDS as the Dow is to Stox) Main, which contains the 125 most liquid Investment Grade companies, was trading over 150 for the standard 5 year maturity it implied (assuming a 40% recovery on Senior Debt, and keeping the maths really simple) that 3 of these Blue chip companies would be going out of business a year, every year for the next five years. If you look at the household names in the Itrax Main noone would believe that to be the case, but that was where it was trading. Big players are subject to regulation and stringent internal Risk Management which means sometimes risk will price cheap and normal private citizens should take advantage.

Conclusion:
If Kaup want to pay up to get liquidity in and the Swissy depositors protection scheme is water tight then it's clearly a no brainer. Get the money over to them and be happy to have the chance to do so.
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Last edited by Shove; 25.06.2008 at 13:11.
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Old 04.07.2008, 01:13
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Re: New Online Bank .... more %

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Cannot imagine that so many depositors would open accounts at Kaupthing.
As Shove stated, its clearly a no brainer. It has been set-up this way, 1200 new accounts in the first month of operation is a very good indicator of that. It's certainly keeping me & my colleagues busy

Michelle

Last edited by Gr8-Ideas; 04.07.2008 at 01:26.
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