Why isn't cash held in savings accounts?

[stone]

Clive I think that is exactly what happened. Our local council here also had lots of money deposited with them as did the cancer hospital here (Christies Hospital). I don't think either instution got their money back. With the hospital I think it was £6.5M.

[WildAboutHarry]

You can fix that by looking at this comparison of a silver certificate to a regular dollar bill.

Is it just me, or does George seem more serene on the Silver Certificate?

[MediumTex]

Clive I think that is exactly what happened. Our local council here also had lots of money deposited with them as did the cancer hospital here (Christies Hospital). I don't think either instution got their money back. With the hospital I think it was £6.5M.

Wait, you're in Iceland?

That's awesome. 

I used to work with a guy from Iceland named Helgi.  I loved that guy.

[stone]

Clive I think that is exactly what happened. Our local council here also had lots of money deposited with them as did the cancer hospital here (Christies Hospital). I don't think either instution got their money back. With the hospital I think it was £6.5M.

Wait, you're in Iceland?
That's awesome. 
I used to work with a guy from Iceland named Helgi.  I loved that guy.

No, No, England near Manchester as Clive guessed (near where League of Gentlemen is set). Icesave was one of the many Icelandic fingers in the UK pie at that time. Basically Icelandic banks were massively immersed in a carry trade between Japanese Yen and various huge dubious UK ventures. As soon as the Japanese banks saw that the UK bubble was about to pop, the short term lending to Iceland stopped dead and Icelandic banks faced implosion. A last ditch survival attempt by the Icelandic banks was to try and get UK deposits to replace the Yen carry trade as that was drying up. That was what Icesave was.

[gizmo_rat]

Icesave was one of the many Icelandic fingers in the UK pie at that time.

I had the bulk of my savings in Kaupthing edge which was a high interest savings account recommended by all of the personal finance sites at the time. In 2008 the UK government shut them down and transferred deposits to ING direct, however that took months during which time I had no visibility or access to my savings.

So that's a good reason not to hold too much cash in savings accounts and to not take your advice from personal finance sites.   

[smurff]

Thanks gizmo rat, it's good to hear from someone who has actually had this experience.

And the Kaupthing/Icesave mess was just two aberrant banks--imagine what could happen if ALL (or most) of the banks went off at once.