Co-op Bank kerfuffle

[Dixie68]

I saw in the news today that Moodys have reduced the Co-op Bank's credit rating to junk status. Now I've been reading that it doesn't actually mean much in this case as the Co-op is in an unusual position for a bank because it has vast holdings in other areas such as shopping, funeral services etc, so it will theoretically have no likelihood of leaving its savers in the lurch.
This is all well and good, but what does it really mean for people like me? I have a current account with them and a savings account which has quite a bit of money in it. I could have gone with another bank but to be honest I have never had a problem with them, which is more than can be said of my previous banks, NatWest and HSBC. I like the Co-op bank.

I'm not going to withdraw my money - should I?

[anonymous-user]

Unless you have more than £85,000 in there then in theory there is no need to withdraw your money as the government will guarantee it.

If people do start doing that then that will be the end of them, hopefully we've gone beyond that now.

[Helicopter123]

Why take the chance?

[CatJ]

I've got an account with them and I will continue to use them.

[marky1]

If you have more than 85k in there it's stupid leaving it in, where is the upside? May as well take it out and see how things are in a few weeks, can always stick it back in again.

[User33678888]

How long would it take, hypothetically, to get ones money back (under £85k )from the government insurance scheme IF Co-op go under?

[fandango_c]

Inkyfingers said:

Unless you have more than £85,000 in there then in theory there is no need to withdraw your money as the government will guarantee it.

What happened in Cyprus though? Yes, it's very unlikely to happen here, but in theory there is good reason to withdraw all of your money.

Why take the risk?

[Jockman]

The COOPs core business remains food, with the funeral side being a bit of a cash cow.

Perhaps the credit rating is a reaction to their recent pull out from the Lloyds deal ?????

They are my biggest customer in one area but I also have several loans with them in another area. I am not minded to panic.

[SGirl]

User33678888 said:

How long would it take, hypothetically, to get ones money back (under £85k )from the government insurance scheme IF Co-op go under?

I'd like to know this, too. Either way, I'm looking for a new business bank account today. Just to be on the safe side.

[uknick]

fandango_c said:

What happened in Cyprus though? Yes, it's very unlikely to happen here, but in theory there is good reason to withdraw all of your money.

Why take the risk?

How is the Cyprus issue relevant? They are talking about top slicing all banks in Cyprus. So, where do you re-invest the money? Overseas?

[fandango_c]

uknick said:

fandango_c said:

What happened in Cyprus though? Yes, it's very unlikely to happen here, but in theory there is good reason to withdraw all of your money.

Why take the risk?

How is the Cyprus issue relevant? They are talking about top slicing all banks in Cyprus. So, where do you re-invest the money? Overseas?

An example of where a government guarantee on bank deposits would not protect savers deposits. I.e. very relevant.

[Dixie68]

WeirdNeville said:

I hope people don't pull all their cash out though, that would sink them and they are a decent bank.

I've decided to leave mine with them, they are definitely a good bank. Just to be on the safe side though I'll make sure I don't go over the £85,000.

[smckeown]

User33678888 said:

How long would it take, hypothetically, to get ones money back (under £85k )from the government insurance scheme IF Co-op go under?

The FSCS are in the process of implementing systems to cope with a major bank failing and paying all depositors within 7 working days.

[uknick]

fandango_c said:

An example of where a government guarantee on bank deposits would not protect savers deposits. I.e. very relevant.

But, my question still remains, "where do you move your money to?", out of the UK? If so, to where?

If you just move it from one UK bank to another, is that not frying pan to fire, if your assertion is correct?

[fandango_c]

uknick said:

fandango_c said:

An example of where a government guarantee on bank deposits would not protect savers deposits. I.e. very relevant.

But, my question still remains, "where do you move your money to?", out of the UK? If so, to where?

If you just move it from one UK bank to another, is that not frying pan to fire, if your assertion is correct?

Moving a deposit to another UK bank who debt isn't rated as junk would not be going from the frying pan into the fire.

[ringram]

fandango_c said:

An example of where a government guarantee on bank deposits would not protect savers deposits. I.e. very relevant.

Utterly irrelevant to the UK.

[Octoposse]

ringram said:

fandango_c said:

An example of where a government guarantee on bank deposits would not protect savers deposits. I.e. very relevant.

Utterly irrelevant to the UK.

Quite so - the UK government can just print the stuff to pay out creditors - an option not available to Cyprus.

[fandango_c]

Octoposse said:

ringram said:

fandango_c said:

An example of where a government guarantee on bank deposits would not protect savers deposits. I.e. very relevant.

Utterly irrelevant to the UK.

Quite so - the UK government can just print the stuff to pay out creditors - an option not available to Cyprus.

It's an example of a government not meeting a guarantee.

The UK government may be in a position today to meet their guarantees, but that may not be the case tomorrow.

Why take an unnecessary risk?

[simoid]

fandango_c said:

Why take an unnecessary risk?

Indeed.

Why bother with banks when we've all got perfectly good mattresses?

[SGirl]

simoid said:

Indeed.

Why bother with banks when we've all got perfectly good mattresses?

With the amount of interest the banks are paying at the moment, you may as well keep all your money under the mattress.

I asked my accountant about this whole scenario yesterday. He reckons that Moody's are the most negative of the credit agencies and that the CB probably won't be going under any time soon.

I was thinking of switching banks anyway - I find it very frustrating that I can't make real-time transactions on weekends with the Co-operative Bank, it's the only time I have available to sort out bills and things, and I like the money to go straight away even if it doesn't credit until the Monday! So now seems as good a time as any to sort it out. I've shifted out enough money to meet my tax obligations and keep myself afloat for 3 months, the rest can stay in the account until I make the switch.