# What if Spanish bank crashes?



## Ann Jay Cee (Dec 10, 2014)

I have found my place in the sun and am getting ready to pay the balance. If I transfer my money into a bank in Spain and the bank goes out of business, am I covered by something like the Financial Services Compensation Scheme in UK?


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## Alcalaina (Aug 6, 2010)

Yes you are. The guaranteed sum is €100,000. And the "bad" Spanish banks all crashed a few years ago, so the ones that survived are pretty safe!


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## Lynn R (Feb 21, 2014)

Your funds are guaranteed up to a limit of €100,000 - pretty standard across Europe now, I think.


Bank deposit guarantees in Spain - Spanish Property Insight

No Spanish banks failed the ECB stress tests conducted pretty recently (November 2014?).

http://www.ft.com/cms/s/0/6a9466fa-5d2f-11e4-873e-00144feabdc0.html#axzz3OzF1sPEC


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## Ann Jay Cee (Dec 10, 2014)

That is a great relief! Thank you very much for your speedy replies.


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## alborino (Dec 13, 2014)

Just for anyone interested. I participated in a recent discussion that included several IFAs and other interested parties. In brief findings were: 

Of course the chance of a bank going belly up during the time your money is deposited is minimal but the impact on the individual would be devastating.

We found no standard insurance policy/product for this.

Insurance companies would do it but it would involve the cost of special underwriting and thus be expensive (you'd need to be dealing in millions as one guy put it).

A better bet would be to approach the betting companies. You could try placing a bet that say "ABC off shore" would go bust in the next 6 months. Strangely betting companies sometimes take on 'non balanced book' bets as it is good publicity at low risk. But placing such a bet might lead you to some form of investigation.

But the general conclusion was distribution of money across protected accounts was the best practical solution to reducing risk.

It was however pointed out that while protection funds for off-shore locations were in place they would likely prove inadequate to cover all claims resulting from a major disaster. Also that some off-shore locations only offered £20,000 protection. And many would give priority to residents of the off shore location.

It was recognised that distributed funds could make it harder to guarantee total funds existed.

HTH someone


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## Horlics (Sep 27, 2011)

The riskiest part of the transaction will be when it's sat in your abogado's client account. Choose one that's been around for years.

I'm not saying that it's something to worry about, but it's more likely your lawyer will go bust than your bank will.

QUOTE=Ann Jay Cee;6195898]I have found my place in the sun and am getting ready to pay the balance. If I transfer my money into a bank in Spain and the bank goes out of business, am I covered by something like the Financial Services Compensation Scheme in UK?[/QUOTE]


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## olivefarmer (Oct 16, 2012)

I am no financial expert but would suggest that any money you have on deposit is spread over a number of accounts. With none having more than 50k. 

I strongly believe that the day of reckoning is yet to come for may EU countries. Don't forget they have eye watering deficits that continue to increase. Low interest rates are masking the seriousness of the problem. Spain still has a lot of exposure to Portuguese debt and Portugal too isn't out of the mire by a long way.

When that day comes I expect a %grab of your assets. After all it is easier to get money off people with money than those without. I still maintain the Cyprus grab was a test case as in "yes do that, lets see how it goes". For anyone thinking the idea is a bit far fetched, I wonder why assets of over 50k have had to be declared but aren't being taxed.....


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## alborino (Dec 13, 2014)

olivefarmer said:


> I am no financial expert but would suggest that any money you have on deposit is spread over a number of accounts. With none having more than 50k.
> 
> I strongly believe that the day of reckoning is yet to come for may EU countries. Don't forget they have eye watering deficits that continue to increase. Low interest rates are masking the seriousness of the problem. Spain still has a lot of exposure to Portuguese debt and Portugal too isn't out of the mire by a long way.
> 
> When that day comes I expect a %grab of your assets. After all it is easier to get money off people with money than those without. I still maintain the Cyprus grab was a test case as in "yes do that, lets see how it goes". For anyone thinking the idea is a bit far fetched, I wonder why assets of over 50k have had to be declared but aren't being taxed.....


Much truth in what you say Oliver but there does seem to be some sort of survival mechanism that holds us back from Armageddon. And Germany has good reason to not want Armageddon. So even though Spain in the Euro is a headless chicken no one really wants to see it go under. Suffer yes, and it certainly is suffering, but not go under.

And in my experience if they rob the middle class of spain it will be the poor who go hungry .

But I can't worry about this in terms of how I run my life. I can just spread my assets about and hope for the best - as you suggest. [If I ever deposit 50000 in Spain please shoot me. I will obviously be insane ]

As you say just spread it around and ensure you have assets outside spain


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## Horlics (Sep 27, 2011)

If you Google something including g-sifi and deposit raid, or something similar, you will come across a document penned by the Bank of England explaining how a raid just like the one in Cyprus will happen in the UK. It's a planned-for event.

The UK has 1.5 ish trillion of debt which it is able to leverage because it has a long history of meeting its obligations. It will need cash the day it can't make the payments, and the only place there will be any is in savings accounts. They will take it, they will have no other option.

I think it's unlikely, but who knows.

About the guarantee and the spreading of cash. Spreading it around protects against any one bank going under but the EU cover for deposits is per-person, not per-account. If I hold 200k in total with 100k in each of two banks, if they both go under the government guarantee covers a total of 100k.



olivefarmer said:


> I am no financial expert but would suggest that any money you have on deposit is spread over a number of accounts. With none having more than 50k.
> 
> I strongly believe that the day of reckoning is yet to come for may EU countries. Don't forget they have eye watering deficits that continue to increase. Low interest rates are masking the seriousness of the problem. Spain still has a lot of exposure to Portuguese debt and Portugal too isn't out of the mire by a long way.
> 
> When that day comes I expect a %grab of your assets. After all it is easier to get money off people with money than those without. I still maintain the Cyprus grab was a test case as in "yes do that, lets see how it goes". For anyone thinking the idea is a bit far fetched, I wonder why assets of over 50k have had to be declared but aren't being taxed.....


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## alborino (Dec 13, 2014)

Just a thought. If they (Spain, the EU, the UK) took proportional amounts of money from all citizens across the board to stabilise the ship I'd fully support that  Better that than leave the debts for the grandkids 

What I can't except is how Spain has allowed the rich to rob the poor. I think that stinks and I'll only be convinced things have changed when a certain royal is in jail or proven beyond all reasonable doubt to be inocent - but I'm not holding my breath


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## Horlics (Sep 27, 2011)

Rich and poor....

The first one was very good. I haven't seen the 2nd part yet.


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## Isobella (Oct 16, 2014)

I think the Spanish banks are fairly solvent right now. I would hate to try to reclaim if they went bust if it is anything like the bank guarantees offered to people making deposits on property. They have to spend thousands going through the courts to get the money back.


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