Skip to comments.Cyprus to shape future euro bank rescues: Eurogroup head
Posted on 03/26/2013 1:01:30 PM PDT by EBH
A rescue program agreed for Cyprus will serve as a model for dealing with future euro zone banking crises and other countries will have to restructure their banking sectors, the head of the region's finance ministers said.
The approach would mark a radical departure for euro zone policy after three years of crisis in which taxpayers across the region have effectively been on the hook for resolving problem banks and indebted governments via multiple rescue programs.
"What we've done last night is what I call pushing back the risks," Dutch Finance Minister Jeroen Dijsselbloem, who heads the Eurogroup of euro zone finance ministers, told Reuters and the Financial Times on Monday, hours after the deal was struck.
"If there is a risk in a bank, our first question should be 'Okay, what are you in the bank going to do about that? What can you do to recapitalize yourself?'. If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalizing the bank, and if necessary the uninsured deposit holders," he said.
(Excerpt) Read more at reuters.com ...
You or I wouldn’t have been voting for them...but we’d be paying....
so much for it being a “one off”
I am sure the Dems are taking copious notes
That is only the first tranche, there will be more bailouts required in Portugal, Spain, Italy, and even France.
And so what is this quibbling we here from 0bama about $250,00? So it is OK for the Cypriot businessman to lose? I don't get what appears to me to by your nonchalance about it?
Exactly! Why would anyone in the EU keep money in the banking system now that the handwriting is on the wall?
Socialism on the march
My guess is that those tranches are less likely to asked for now that the precedent has been set in Cyprus ... bailouts are no longer free.
And now that there is precedent for confiscation of bank capital...the EU is aglow with excitement over this new opportunity.
Perhaps German taxpayers are aglow with the prospect of getting something back after bailing out so many freeloaders.
Wait - why’s this the “opposite of a bailout,” therefore good?
This is theft of deposits and shareholder worth, pure and simple.
Theft by whom? The bank(s) have failed. The only people that actually deserve their money are the insured depositors. And that is exactly who is NOT getting wiped out or taking a huge haircut - the insured depositors. There is no good solution here. This one is just better than going directly to the taxpayers to bail out yet more banks. In this case the shareholders in the “bad” banks lose everything - just like shareholders in other bankrupt company lose their shirt. That’s how it should work. Uninsured depositors (deposit amounts over 100k Euro) are going a lot of money, but that’s better than losing ALL their money. Everyone knew these banks were in serious trouble, and they knew it for a long time now. Shareholders and big depositors just bet on the resolution being another typical tax payer financed bailout, the were wrong.
What you did last night is what I call theft.
“Uninsured deposits” are presumably at risk from common theft — not govts. and policies supposedly in place to ENFORCE these very agreements (rule of law).
You seem like a ‘Rat visitor, from your “comments.”
Have a nice day (get lost.)
You're the one that posted to me first you dimwit. Now I see you are clearly a real jerk too.
Uninsured deposits are presumably at risk from common theft not govts. and policies supposedly in place to ENFORCE these very agreements (rule of law).
The banks failed you idiot. Do you get that? FAILED. That's why deposit insurance exists, to protect people in the event of bank failure. People were either going to lose some of their money or ALL of their money. The other option was for another taxpayer funded bailout of banks - which was thankfully rejected.
There was no good solution here. The government and the banks were negligent and have been for years. The voters are ultimately responsible for the corruption they allowed to take root through the politicians they've been voting for over and over again.
You seem like a Rat visitor, from your comments.
You obviously have zero idea what you are talking about. Maybe you should take the time to learn something, which you clearly need to do, instead of just hurling insults. The reason this bailout is better than what we've seen in the past is because it held bank shareholders responsible, rather than immediately ask taxpayers to bail them out. Uninsured deposits are just that, uninsured. Everyone in the entire world knew Cyprus' banks were in deep trouble. There is no good outcome here, but this is better than what we've seen in Greece and elsewhere. For once "bad" banks will be allowed to fail, shareholders will get wiped out and uninsured depositors (over 100k Euro) will only lose some of their money instead of all of it.
You don’t know what you’re talking about. Thanks for siding with govt seizures of wealth to “solve” public-sector deficits. Why are you defending this overt state interventionism?
“Whether in Cyprus or in other countries, politicians tend to think in short run terms, if only because elections are held in the short run. Therefore, there is always a temptation to do reckless and short-sighted things to get over some current problem, even if that creates far worse problems in the long run.
Seizing money that people put in the bank would be a classic example of such short-sighted policies.
“After going back and forth, the government of Cyprus ultimately decided, under international pressure, to go ahead with its plan to raid people’s bank accounts.
“But could similar policies be imposed in other countries, including the United States? One of the big differences between the United States and Cyprus is that the U.S. government can simply print more money to get out of a financial crisis. But Cyprus cannot print more euros, which are controlled by international institutions.”
- Tom Sowell, “Can It happen Here?”
FYI, the depositors are “Taxpayers” too. Why are you siding with taxpayers on the supply (filers) side, yet not siding with asset holders who are now “defacto” taxpayers preyed upon BY THE STATE?
Why not have the politicians do the perp walk, plus, cut down on all the state spending to unions, corporate welfare seekers, rent seekers, etc. to solve this problem?
Are we really arguing about this????????