How Safe is My Money In The Bank?

This video is sponsored by @Babbel

Is the money in your bank account safe? Regulators and central banks have been trying to avoid a banking crisis but people are still concerned. So how can we gauge whether our money is safe? In this video, I show you how to assess this risk for yourself and I’ll also show you how to reduce it.

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Timestamps
00:00 Introduction
00:28 Bank Runs
08:47 UK & US Deposit Guarantees
11:46 Systemically Important?
14:02 Loss Absorbing Capital
18:15 Reputation
19:53 Signal From Share Price
20:49 Conclusion

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DISCLAIMER
All information is given for educational purposes and is not financial advice. Ramin does not provide recommendations and is not responsible for investment actions taken by viewers. Figures that are quoted refer to the past and past performance is not a reliable indicator of future results.

[patches]

Great content! Can you make a similar video about brokerage accounts such as Schwab or Fidelity?

[nb-iirb]

I am still unsure whether it makes sense to split investing accounts between brokers. What happens if the custodian (outside of brokerage) goes bust? Also, even though accounts are supposed to be segregated with a custodian, what happens if they are not segregated?!

[andyj]

Very clear and illuminating content. Thank you very much.

[julienhamon]

Crédit Agricole groupe CET1 ratio is actually about 17% not 11%. 11% is only the listed scope and exclude the French retail banking part (cooperative regional banks) which owns Credit Agricole SA which is the listed company. The are all member of a solidarity mechanism that compell them to support each other in capital and liquidity. Altogether then 17%

[jonahtwhale]

It depends....
In Australia there are a number of deposit guarantee mechanisms but they are not compulsory. The regulator or government can chose to invoke them or not. They do not have to.

[simony]

Presumably the guarantee is only solid if it’s never called upon, they can bail out a bank but a systemic failure across the banking system would be beyond them - in anything that considered of value.

[timelston]

Does the UK have credit unions? In the US credit unions fall under different regulations than banks and are safer. That's another option.

[simonvaughan]

What if you have a SIPP or a SSAS with a bank with substantial cash. Does this have other financial protection above and beyond the £85k protection?

[juliettan]

I recently thought about investing in S&S ISA (ETFs) with investengine or trading 212 but not sure if my money are protected up to £85k per institution or not in the event of company /bank etc going bust, not investment risk prospective. After looking up FCSC and CFA website I am even more confused what is and what isn't covered. Does anyone know?

[infour]

Perhaps a little off topic but wouldn’t a bank run create an opportunity for a government to introduce CBDCs. That would concern me.

[ravsingh]

Even the banks don't keep their money in banks!

[Gaz]

Is it safe? Reminds me of Laurence Olivier in The Marathon Man. 🙂

[OnTheRoof]

can someone tell me why a house price crash would shrink a banks balance sheet? I see that the value of the house is now lower, but a house price crash wouldn't necessarily affect the ability of the home owner to pay the mortgage at it's original value? i'm missing something i'm sure

[davidmorgan]

Are Lloyds and Santander in U.K. safe banks ?

[russellrobinson]

How safe is the NS&I government bank they say that they cover your deposits 100% by the Treasury. But is there still a chance that the government gets into trouble? Please confirm.
Thanks Russell

[lickerishtuna]

Would a subsidiary bank such as First Direct be considered as systemically important as its parent bank HSBC?

[prolarka]

I wish I had the problem of having multiple 85ks in banks.

[kronos]

I am my own bank. I have access to large amounts of cash in my own safe. I have gold and silver. I have zero faith in third party interlopers. Your money in a bank makes you a creditor to the bank, Banks will fail and they will default. FSA and the 85K is BS. You did read the small print didn't you !!?
You do understand what a Bail IN is don't you !!? Now tell me the 85K rule will apply ! ( HINT: It won't)

[MagicNash]

So...tuna bonds into fun portfolio when, Ramin?🤣Sounds tasty!

[squadmeta]

UK banks have nothing to worry about, the sector of the population who would partake in a social media led bank run, are all on bank balance sheets as assets not debts.