Posted on 03/23/2013 8:03:39 AM PDT by SeekAndFind
Savers in Cyprus could face losing one-quarter of their bank deposits under new proposals being discussed by the government as ministers flew to Brussels to salvage a European bailout.
The new bank levy would only apply to people with more than €100,000 (£85,260) in their accounts, according to the finance minister, Michael Sarris, who also said that significant progress had been made in talks with European officials.
President Nicos Anastasiades travelled to Brussels to work out an alternative plan to raise funds that would allow the country to qualify for an international bailout. Cyprus must raise €5.8bn (£4.9bn) before Monday to qualify for the €10bn EU bailout it needs to prevent the collapse of its banks and a potential departure from the eurozone.
The idea of raising money through a one-off levy on bank deposits was criticised in Cyprus, Russia and elsewhere and was unanimously rejected by the Cypriot parliament earlier this week, but is being reconsidered after negotiations with Russia to find alternative finance did not achieve a result.
On Friday, the Cypriot parliament passed nine bills, including three that would see ailing banks restructured, starting with Laiki, Cyprus's second-largest bank, a "national solidarity fund" and capital controls that would prevent large withdrawals from the country. A decision on the controversial bank savings levy and how it would be applied is due on Saturday.
Other Cypriot politcians discussed a smaller bank levy of 1% which would be aplied to all accounts. The debate is divided between those that want the levy to be borne only by the wealthy which includes a high percentage of Russians who hold €30bn in Cypriot banks.
(Excerpt) Read more at businessinsider.com ...
What happened? Did Uncle Billy leave 30 billion Euros in Mr. Potter’s rolled up newspaper?
I think we’re witnessing the beginning of the end... And it won’t end well.
Perhaps, perhaps not. An important part of the article:
The new bank levy would only apply to people with more than €100,000 (£85,260) in their accounts
That means that they have backed off of reneging on federal deposit insurance. Had they given insured accounts a haircut, the entire concept of insured deposits would have become meaningless. Every bank in the world would be susceptible to runs.
If you were a Russian billionaire keeping two or three billion in a Cyprus bank....you are a loser. You did everything to avoid taxation....to laundry money....and just fly in and avoid all the standard rules that apply to real members of the EU. So time has caught up with you. I don’t see an issue here.
The EU has known for a decade about the abusive habits of the Russian billionaires, and always hinted that it’d have consequences. Well....here we are.
I bet the politicians got their money out two weeks ago.
Class envy, much?
I am astounded by your willingness to sieze someone else’s property.
No just Russian billionaires keep money in Cyprus. Many Russians still don’t trust the banks in Russia. There was massive inflation during the 90s. Monthly pension payments were not enough to buy one loaf of bread. When the currency was converted from Soviet money to Russian, there was a limit. A lot of people lost a lot of money.
Then in 1998, Russia defaulted on international loans. Many banks went bankrupt. Many people lost their savings.
In short, Russians who have money don’t trust the Russian banking system and prefer to put it where they believe it’s safe. Cyprus had a reputation for having a safe, stable banking system. Russians want to get as much money out of the country as possible because they are still uncertain of the future here.
Many Russians are also buying property in the West. I know a lot of intelligent, well educated Russians whose goal it is to move to the West, where they perceive life to be better and more stable.
Once deposits are allowed to be stolen by the govt, banks will no longer be viewed as safe. People will not keep money there and the banks will go away.
The Russian Mafia guy’s aren’t going to like this.....
They have been talking about this for about two weeks. If I lived there every penny I had would be taken out of the bank and I’d convert it to metals. We’ve always been told that part of what caused the depression was people in a panic, removing their money from the banks. Funny the stock market had had hit new highs right about that time too.
How is this not grand larceny, a felony theft? How is government above and beyond the law? How does law not apply to government?
Ah, yes - the very same thing is here and now with the Obama administration....
I would have a serious talk with my banker where I tell him I had a contract with him and his bank. I put $X in and I expect $X out. If he only gives me $Y I would ask him how much of his bank did he think $X-Y was worth, because I don’t want to burn down or blow up any more than he owes me.....
If you invest your money, and the investment says that your first 100,000 is insured, you should assume the rest could be lost, and ask for interest to be paid according to that risk.
And given that these banks have been paying 7% interest, the depositors have been well-compensated for their risk up until now.
Which of us wouldn’t kill for a 7% return on our FDIC-insured deposits.
Ha...ha....good luck with that..,.
the collapse will be faster and deeper.
next up ...bank safety deposit boxes.
What else is ludicrous is the advice to put your money in precious metals——if you don’t have actual physical possession of those metals.
ANYTHING stored in someone else’s bank or business vault can be taken from you before you even know.Sotrusting “your gold” is safe because end-times preacher and shill for a gold company promises to keep it safe is no different than having a bank.
WE trust the banks and government not to steal despite the evidence they both will IF they can get away with it!
I wouldn’t have phrased it like the other poster but the fact is not bailing out Russian billionaires came into the conversation early and was the reason for the initial plan.
The way this is shaking out i would not be surprised if it was Putin’s idea to hurt them this way which he communicated to Merkel. He’s been looking for ways to get them to keep their money in Russia. I would not put this past him.
They want to control outflows of cash as well. Restrict cash from leaving Cyprus. Of course in 6-12 months everyone will have taken their money out and boom no more banking business.
The haircut has been lowered to a frontal lobotomy.
Once the topic was put out there the banks had closed for business that day. They have yet to reopen. You’d be taking whatever you were allowed via ATM and nothing else.
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