Cyprus Levy on Bank Accounts
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Ian,
Yep, fair point but as usual the 'law of un-intended consequences' will bite the Eurozone firmly in the plums. Read the words of the Dutch Finance Minister this afternoon about this being a 'template for future bailouts'. This has rattled the market and is only likely to end in an uncomfortable nights sleep for many who will stuff their mattresses with cash because they can't trust the banks.
Yep, fair point but as usual the 'law of un-intended consequences' will bite the Eurozone firmly in the plums. Read the words of the Dutch Finance Minister this afternoon about this being a 'template for future bailouts'. This has rattled the market and is only likely to end in an uncomfortable nights sleep for many who will stuff their mattresses with cash because they can't trust the banks.
So it's suddenly acceptable for state sponsored theft from someone who has over 100k in the bank is it? Why not 99.9k? What if that money is part of a legitimate business and belongs to customers and not the account holder.
The politics of envy (or socialism by a more accurate name)......
The politics of envy (or socialism by a more accurate name)......
Until a few years ago you would have got back 90% up to 20k and nothing after that.
The guarantee is - basically - optional and the levy perfectly legal.
If you think you have some sort of divine protection with your money in a bank account then you are naive.
Ian,
Yep, fair point but as usual the 'law of un-intended consequences' will bite the Eurozone firmly in the plums.
Yep, fair point but as usual the 'law of un-intended consequences' will bite the Eurozone firmly in the plums.
The effect of a bank crash on people is well known by bankers. They obviously want people to spend money and not save which is why negative interest rates are under consideration.
Last edited by peter we; 25th Mar 2013 at 18:43.
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Some pretty high level chess going on here. Effectively, Ze Germans are destroying the financial services industries of other competing European nations. Hardly cricket, but I suppose ze Germans can sell it to their electorate as a reason to support smaller nations.
Germany always was an export nation. It appears as though they are now looking to expand their financial services exports. Thank Christ we never joined the euro, or Hitlers idea for a unified Germany would have come 70 years later!
Quite interesting that uk property could be seen as a safe haven, if we can just get the NIMBYs to pipe down over green belt development.
Germany always was an export nation. It appears as though they are now looking to expand their financial services exports. Thank Christ we never joined the euro, or Hitlers idea for a unified Germany would have come 70 years later!
Quite interesting that uk property could be seen as a safe haven, if we can just get the NIMBYs to pipe down over green belt development.
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'The effect of a bank crash on people is well known by bankers. They obviously want people to spend money and not save which is why negative interest rates are under consideration.'
If that is Obergruppenfuhrer Merkels idea then I would suggest that she has been smoking too much of the Dutch Finance ministers Class A stash. Banking is all about confidence. This sorry episode has not only shot the golden goose, it has been tortured first and then hung out to dry.
If it is about ruining the financial institutions of other countries, then fair enough. It is a retarded plan that will end badly.
If that is Obergruppenfuhrer Merkels idea then I would suggest that she has been smoking too much of the Dutch Finance ministers Class A stash. Banking is all about confidence. This sorry episode has not only shot the golden goose, it has been tortured first and then hung out to dry.
If it is about ruining the financial institutions of other countries, then fair enough. It is a retarded plan that will end badly.
US President Calvin Cooledge
"
Quotes from Calvin Cooledge:
"Borrowed money, even when owing to a nation by another nation, should be repaid. They hired the money didn't they? Let them repay it. 1925, Public Years. p.108
Quotes from Calvin Cooledge:
"Borrowed money, even when owing to a nation by another nation, should be repaid. They hired the money didn't they? Let them repay it. 1925, Public Years. p.108
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So with the worry of losing your savings in the EU with banks struggling, where does that leave you, shift your currency out of the EU or to the strongest performing Country within it? Ohh hang on that will be Germany.... Hmmmm nice plan there Merkels ...
It will destroy the banking system.
It will destroy the banking system.
Last edited by NutLoose; 25th Mar 2013 at 21:03.
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Some say, wars are no longer fought with weapons but finance.
€10 billion is not much when measured against the bailouts for Spain and Greece.
Why devastate Cyprus ?
There is some game or agenda being played out here. Look, now I am a 'Conspiracy theorist'. The elite have been after a cashless society for years. Perhaps these are the first major moves toward that end?
Contagion is likely. I suggest banking in Singapore and Brasil.
Hero - Yes ! Gold and silver, and make sure it really is in the bank.
In the 1930's, gold was confiscated in the USA. Sound familiar?
€10 billion is not much when measured against the bailouts for Spain and Greece.
Why devastate Cyprus ?
There is some game or agenda being played out here. Look, now I am a 'Conspiracy theorist'. The elite have been after a cashless society for years. Perhaps these are the first major moves toward that end?
Contagion is likely. I suggest banking in Singapore and Brasil.
Hero - Yes ! Gold and silver, and make sure it really is in the bank.
In the 1930's, gold was confiscated in the USA. Sound familiar?
Last edited by Stuffy; 25th Mar 2013 at 21:54.
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Gold isn't a good idea. They froze gold transactions back in the 70's, no reason why they couldn't again.
Cyprus is the sacrificial lamb. Now every other nation struggling (piigs watch out) knows the rough deal that faces them. Greece was too big, too big to fail. Cyprus however.....
The message is stark... Either cut your public expenditure, including, but not limited to state pensions, or we will raid your bank accounts. The bailout pot is not limitless and the Germans will not allow hyperinflation.
I give it a week before there will be runs on banks across the euro zone. May be a good week to get shorting national indices.
Cyprus is the sacrificial lamb. Now every other nation struggling (piigs watch out) knows the rough deal that faces them. Greece was too big, too big to fail. Cyprus however.....
The message is stark... Either cut your public expenditure, including, but not limited to state pensions, or we will raid your bank accounts. The bailout pot is not limitless and the Germans will not allow hyperinflation.
I give it a week before there will be runs on banks across the euro zone. May be a good week to get shorting national indices.
Last edited by VinRouge; 25th Mar 2013 at 22:08.
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The reality is, someone has to carry the can; but who? The retired nurse in Limassol, the Cypriot who works at WSBA, Germany and the Troika.. or those depositors with big accounts in Cypriot banks (wealthy Cypriots, Russians, Brits etc)? We now know the answer - the last in that list and it doesn't really matter how you got to the conclusion, the fact is, the conclusion was always going to hurt someone. The issue is, what are the ramifications of the bigger picture?
German pensioners face a real lowering of standards from the early 90s and to an extent, I can understand the common or garden type German worker now saying ''Look, we don't care if you look on us as control freaks, thats in the past and we don't care.. bottom line is, we have had enough of paying for the Euro''. Germany and the troika have navigated with the constraints they were facing and lets not be naive - there is a German election next year. Do we really want an unsettled and divided Berlin?
Did anyone watch Boris Johnson last night? I did and I ended up thinking ''Nice bloke to an extent, the kind of bloke you'd have a pint with, but my god - if he's the answer, what was the question again?''. And its the same for the EU. I cannot imagine a greater decimation and undermining of the principle of a unified economic and financial area that what has happened here, amounts to. And thats the really big issue in my humble opinion.
There can be no such thing as a currency union in which capital cannot flow freely; that was always one of the principles of the EU. We have seen, once and for all, and finally, a rejection of one of the fundamental goals of European economic unity, not, frankly, some mineral oligarch stamping his feet in anger. I live in Rutland, if I wanted to cross the border to draw cash from Stamford (top place to live in the UK according to The Times incidentally!), and couldn't, there wouldn’t really be much of a currency policy in the UK - and thats what we are seeing in the EU. Whether we accept it or not, the reality is, we are seeing a two or three tier Euro.
We saw him off yesterday, he died last week of MND, but I was reminded yesterday of something one of my old Sgts (Paddy Wilson, 1(F) early 1990s) told a Flight Commander quite robustly at Vigo Wood about the dispersal of Harriers - and its a truism. Similarly, if you save in any European bank, in principle, why wouldn't you move your wealth somewhere safer, or even park it in cash under the bed (loads of risks with that!), the minute you detected any hint that your country was in a Cyprus type scenario? Someone mentioned gold; sure, of course controls may be levied on gold, just as they could be on folk with 3 or 4 rental properties.
The issue now of Political and Regulatory Risk is likely to be far higher than it ever was, and possibly as relevant these days as Shortfall, Investment and Inflation Risk. The worrying thing is, Cyprus snored for months, we all saw it coming - they were having naps and sleeping off the Keo. The next time there is a banking crisis in Europe, it will move much faster and it will be far harder to control. There will be lots more unrest as savers try to avoid bank account future losses and capital controls.
And that’s a scary proposition indeed, especially if you look at the French situation and remind yourself how the French react to something as mild (in comparison) as farming controls!
German pensioners face a real lowering of standards from the early 90s and to an extent, I can understand the common or garden type German worker now saying ''Look, we don't care if you look on us as control freaks, thats in the past and we don't care.. bottom line is, we have had enough of paying for the Euro''. Germany and the troika have navigated with the constraints they were facing and lets not be naive - there is a German election next year. Do we really want an unsettled and divided Berlin?
Did anyone watch Boris Johnson last night? I did and I ended up thinking ''Nice bloke to an extent, the kind of bloke you'd have a pint with, but my god - if he's the answer, what was the question again?''. And its the same for the EU. I cannot imagine a greater decimation and undermining of the principle of a unified economic and financial area that what has happened here, amounts to. And thats the really big issue in my humble opinion.
There can be no such thing as a currency union in which capital cannot flow freely; that was always one of the principles of the EU. We have seen, once and for all, and finally, a rejection of one of the fundamental goals of European economic unity, not, frankly, some mineral oligarch stamping his feet in anger. I live in Rutland, if I wanted to cross the border to draw cash from Stamford (top place to live in the UK according to The Times incidentally!), and couldn't, there wouldn’t really be much of a currency policy in the UK - and thats what we are seeing in the EU. Whether we accept it or not, the reality is, we are seeing a two or three tier Euro.
We saw him off yesterday, he died last week of MND, but I was reminded yesterday of something one of my old Sgts (Paddy Wilson, 1(F) early 1990s) told a Flight Commander quite robustly at Vigo Wood about the dispersal of Harriers - and its a truism. Similarly, if you save in any European bank, in principle, why wouldn't you move your wealth somewhere safer, or even park it in cash under the bed (loads of risks with that!), the minute you detected any hint that your country was in a Cyprus type scenario? Someone mentioned gold; sure, of course controls may be levied on gold, just as they could be on folk with 3 or 4 rental properties.
The issue now of Political and Regulatory Risk is likely to be far higher than it ever was, and possibly as relevant these days as Shortfall, Investment and Inflation Risk. The worrying thing is, Cyprus snored for months, we all saw it coming - they were having naps and sleeping off the Keo. The next time there is a banking crisis in Europe, it will move much faster and it will be far harder to control. There will be lots more unrest as savers try to avoid bank account future losses and capital controls.
And that’s a scary proposition indeed, especially if you look at the French situation and remind yourself how the French react to something as mild (in comparison) as farming controls!
Last edited by Al R; 26th Mar 2013 at 09:30.
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Historically, every attempt at currency union has failed.
They cannot control something called 'Bitcoin'.
Bitcoin - Wikipedia, the free encyclopedia
Bitcoin
They cannot control something called 'Bitcoin'.
Bitcoin - Wikipedia, the free encyclopedia
Bitcoin
Last edited by Stuffy; 26th Mar 2013 at 10:31.
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Cypriot Finance minister now stating that largest depositors could face a 40% cut to their savings.... Ouch.
I hope he knows the Cypriot mafia arent going to be best pleased and I wouldnt mind betting a few high level officials will get drilled for this.
Its also worth pointing out that none of this is good for political stability in the eurozone and I bet we see a strong shift to the extremeist end of the left or right.
I wonder what Germany's pound of flesh would have been for the equivalent euro bailout of the QE thats currently in circulation if we, god forbid, had joined the Euro?
Time to get on IGIndex. Some indicies to short.
I hope he knows the Cypriot mafia arent going to be best pleased and I wouldnt mind betting a few high level officials will get drilled for this.
Its also worth pointing out that none of this is good for political stability in the eurozone and I bet we see a strong shift to the extremeist end of the left or right.
I wonder what Germany's pound of flesh would have been for the equivalent euro bailout of the QE thats currently in circulation if we, god forbid, had joined the Euro?
Time to get on IGIndex. Some indicies to short.
Last edited by VinRouge; 26th Mar 2013 at 10:40.
They cannot control something called 'Bitcoin'.
Go and tell the US because they are trying to regulate it right now US to regulate Bitcoin currency at its all-time high - tech - 26 March 2013 - New Scientist
</thread drift>
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Reuters is reporting that although the major banks were supposed to be closed, some depositors were able to access their funds through a variety of means. And no one knows how much cash left the country.
Apparently EU negotiators knew something was wrong when the Central Bank of Cyprus requested more banknotes from the European Central Bank than the withdrawals it was reporting to Frankfurt implied were needed. The Cyprus Popular Bank (Laiki) and the Bank of Cyprus have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia's Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks' largest depositors.
This is important because the bailout deal is very dependent on the government being able to seize up to 40% of deposits over 100,000 euros in order to meet the demands of the EU for a contribution of 5.8 billion euros toward the bailout. If enough cash managed to squeeze out of the country, Cyprus will come up short in its contribution and the EU may back out of the deal.
Bob C
Apparently EU negotiators knew something was wrong when the Central Bank of Cyprus requested more banknotes from the European Central Bank than the withdrawals it was reporting to Frankfurt implied were needed. The Cyprus Popular Bank (Laiki) and the Bank of Cyprus have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia's Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks' largest depositors.
This is important because the bailout deal is very dependent on the government being able to seize up to 40% of deposits over 100,000 euros in order to meet the demands of the EU for a contribution of 5.8 billion euros toward the bailout. If enough cash managed to squeeze out of the country, Cyprus will come up short in its contribution and the EU may back out of the deal.
Bob C
I don't own this space under my name. I should have leased it while I still could
The only difference that I can see is that our Government take 20% or 40% from you before you bank it whereas the Cypriots are now planning to take it after you have banked it.
I am told by my daughter who was recently in Cyprus that you only pay tax on your first income. Apparently a storeman at Akrotiri worked 7-1 for the usual peanuts and paid taxes accordingly. Back home he could run his restaurant etc tax-free. True?
The infrastructure improvement in Cyprus is amazing post 1974. Two new airports, motorways, paved streets, designer street lighting etc etc.
In Madeira they also have a superb new motorway and tunnel system. When the EU funds dried out they simply borrowed more. The numbers were pretty similar to Cyprus and that is just a province of Portugal. I believe their overdraft will take generations to repay.
And our parish council in rural Lincs, pop 2,500, wants to borrow £640k for a White Elephant. Ugh!
Much of the money in Cypriot banks, allegedly of dubious provenance, has probably come from untaxed sources and I suspect that may have been the logic for a 40% hit with €100,000 plus being a not wholly unreasonable limit.
I am told by my daughter who was recently in Cyprus that you only pay tax on your first income. Apparently a storeman at Akrotiri worked 7-1 for the usual peanuts and paid taxes accordingly. Back home he could run his restaurant etc tax-free. True?
The infrastructure improvement in Cyprus is amazing post 1974. Two new airports, motorways, paved streets, designer street lighting etc etc.
In Madeira they also have a superb new motorway and tunnel system. When the EU funds dried out they simply borrowed more. The numbers were pretty similar to Cyprus and that is just a province of Portugal. I believe their overdraft will take generations to repay.
And our parish council in rural Lincs, pop 2,500, wants to borrow £640k for a White Elephant. Ugh!
Much of the money in Cypriot banks, allegedly of dubious provenance, has probably come from untaxed sources and I suspect that may have been the logic for a 40% hit with €100,000 plus being a not wholly unreasonable limit.
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I am told by my daughter who was recently in Cyprus that you only pay tax on your first income. Apparently a storeman at Akrotiri worked 7-1 for the usual peanuts and paid taxes accordingly. Back home he could run his restaurant etc tax-free. True?