Can anyone explain......are banks going to fail?

[LuluJakey1]

I am worried that everything we are seeing about economic recession means the banks are going to crash. How likely is that?

Just make sure you don't have more than £75k in anyone bank as then it's guaranteed by the Govt.

Not that I have that anyway

Under EU regulations (which thank god we still have) all banks and insurance companies now have to prove every year that they have enough capital to withstand a 1 in 200 year catastrophe (like this).

I do think it could be a bumpy ride and having some cash stored safely in the house would be a sensible measure.

Govts cant afford to let all banks fail though so try not to worry about this too much.

Maybe having a bit of cash safely tucked away (don't tell anyone) will help you feel a bit less worried though?

Or split your money across more than one bank...

£85,000 (£170k if in a joint ac ) is the current limit

No, the banks have been heavily regulated since the financial crash so are more prepared for this than most businesses.
I am phoning round our suppliers tomorrow to agree a way forward, hopefully most can manage to extend credit terms.

No, the banks are not going to fail. So stop scaremongering.

Lay off with the scaremongering label. Not everyone is as financially clued up as you. Some people are genuinely worried so show some empathy. You could have said no it's going to be okbecause if this this and this instead of making someone feel even more shit on top of their anxiety.

I am really worried about it. I'm not scaremongering. You can't get a straight answer from them about how likely it is. I asked in 3 locally where we have accounts and each one said a version of 'We can't say we won't because we are not allowed to and I don't know anyway'. No reassurance was offered. I don't understand all the stuff on tv about it. Why are we not just closing the stock exchange? Stopping the panic and the selling?

I have ZERO faith in the banks AND the financial regulator so i think the concern is warranted

The capital adequacy rules were strengthened after 2008. Failure is far far less likely. The restrengthening of balance sheets was partly why QE didn’t work as intended and austerity hurt more than it should.

Interest rates have been lowered to their lowest in history. That's to increase borrowing. The government has borrowed the financial reliefs recently announced. Shares have dropped to an all time low. Now is the time to buy shares while so low. There is movement on the markets as the government begin to financially float major suppliers and services.

Banks wont fail, OP. We may see the end of capitalism as we know it and in some ways, that's not a bad thing.

Banks will survive this, they're global operations. Following the financial crash, lending criterion was tightened. Now it will be relaxed again.

Boom and bust has a long history.

wheres is that the 'stress test' thing I sometimes hear about?

Shares have dropped to an all time low

They haven’t, but the fact they are still cheap is correct

Can you explain in layman's terms what it would mean if banks crash?
We can't access our money? We lose our money?
Please can you go back to basics for me 🙈

Bugaboo I don't understand any of that! Part of what scares me is I don't understand it.

We don't take risks with money. Our money is spread across building societies in Fixed-Term Bonds and an ISA with no more than 85.000 in any and all FCSA guaranteed. I understand that.

But I am scared everything will collapse and the government won't pay up or that it will be 'devalued' and worth nothing. We inherited some money when DH's granny died and are good savers. I gave up my job and salary n the basis that we could afford for me to not work and have a work pension eventually because we would have the money. Now I am just scared we will lose everything.

I know other people have much more immediate awful worries at the moment but the whole thing is scaring me.

Thanks, @Bugaboob. Is it correct that since the announcement of financial aid for businesses they've picked up again and movement is occurring?

OP, your worries are valid. You're protecting your assets. There is nothing wrong with being scared. It's a scary time in so many ways.

@LuluJakey1

It basically means they have more value in their business than they have lent to people. It’ll be ok.

@Absentwomen kind of. Markets have fallen more rapidly than previous crashes, but not as far, we’ll not yet. I’m referencing back to 1900 as that’s when the 23 developed markets run continuous records from. The announcements weren’t received as well as might have been expected but the fall in the £ means stocks have gained, plus other forces have increased stock values today.

Is it the bottom, who knows
When will it recover who knows

Is it a good time to buy a balanced globally based portfolio, hell yes. Just put £100k from our mortgage into the markets.

I’m in my 40’s I’ll be spending this money in my 60’s. This is a January sale.

I’m not worried in the slightest.

The stress test has been canned for this year they've just announced but think it's unlikely.

I wouldn't expect branch staff to be able to answer, they won't know. They just need to be focusing on communities and helping local people access and manage their money at the moment.

That's good to know @Bugaboob. Thanks ever so. As for the OP, being 'cash rich', she could really make her money work for her and her family here?

Totally. However, I have data. I have Monte Carlo modellers. I have understanding. If you buy and panic, it’ll be costly.

Does anyone know what would happen if a bank failed and all your savings were in an offset account against your mortgage? Would it just pay off the mortgage in the event of the bank failing?

Yep