Cyprus bail out deal

antoobrien

creedp wrote: »

As I said earlier discussions around whether one penson is better than another are for another thread as they have little to do with the subject at hand. I have to say though if I were you I'd be looking to provide for my retirement using an alternative route as unless you are on very good money you'll qualify for the means tested pension the way your going.

I agree that this has very little to do with Cyprus and should not be discussed here, I was taking on your point about the garda pension pot (which is fairly accurate as the figures show).

Btw, just on your point the figures show figures in current value, not "projected value" values and were used for meaningful comparison with the PS pensions which are salary based rather than pot based. The projected value is about 3 times higher, iff the underlying investments & assumptions hold up (which I will believe if I live to see it happen).

Back to the point that AlexisM was making re Godge's wealth tax proposal, if private sector pots are considered "wealth" for these purposes, then surely based on the direct comparison I've given the PS pensions should also be considered "wealth". If we are to take a Cyprus style hit on "wealth" as godge suggests, would it be fair to hit me because I have to physically invest my fund, whereas a PS pension comes direct from employer funds (the same applies to any DB pension scheme) and there is no physical investment?

ardmacha

While the PS aspect of things threatens to derail the thread, the thrust of the point is valid, although the opposite holds true that in that if PS pensions can be reduced in the national interest then the levy on private funds in the national interest is also appropriate.

But depositor "levies" are unjust in many ways. There was the example of the guy in Cyprus who had sold his house and who had the sum in the bank pending paying off his bridging loan. His deposit would be cut, but not his loan. Very little of the Eurozone carry-on has to do with better financial governance.

creedp

antoobrien wrote: »

Btw, just on your point the figures show figures in current value, not "projected value" values and were used for meaningful comparison with the PS pensions which are salary based rather than pot based. The projected value is about 3 times higher, iff the underlying investments & assumptions hold up (which I will believe if I live to see it happen).

I wish you the best with your investment .. a 60% pension would be a nice way to see out your time .. here's hoping you get to benefit from it!!

re Godge's wealth tax proposal, if private sector pots are considered "wealth" for these purposes, then surely based on the direct comparison I've given the PS pensions should also be considered "wealth". If we are to take a Cyprus style hit on "wealth" as godge suggests, would it be fair to hit me because I have to physically invest my fund, whereas a PS pension comes direct from employer funds (the same applies to any DB pension scheme) and there is no physical investment?

My problem with taxing future 'wealth pots' is that how do you value them? I don't agree with hitting anyones pension pot - why would a public one be different ot a private one? For one thing it will be subject to tax on maturity - so the Govt will eventually get its pound of flesh. Also how do you differentiate between someone who has just started contributing to their pension and wont benefit from it for up to 40 years as against someone who is retiring in the next couple of years? You don't I suppose which just show how much or an excuse for a legitimate smash and grab it would be. Another issue here is the scale of the hit .. whatever about a 1% levy but if we're talking about a 40% levy on the maximum value of a pension pot payable now .. how the hell is comeone going to pay that? Get a loan? While I don't agree with the grabbing of bank accounts as being done in Cyprus .. at least the money is there now and not some future value of a zero present value.

antoobrien

creedp wrote: »

I wish you the best with your investment .. a 60% pension would be a nice way to see out your time .. here's hoping you get to benefit from it!!

Yeah, I'm hoping it comes out that way too. Although with 40 years of inflation and no index link it won't be worth anywhere near that much.

creedp wrote: »

My problem with taxing future 'wealth pots' is that how do you value them?

One can't. Using the values from my own, what value does one use:
The current 35k invested
The 185k projected "current value" of the pot
The 400k+ "projeted real" value of the pot.

creedp wrote: »

I don't agree with hitting anyones pension pot - why would a public one be different ot a private one?

Good, glad that's out of the way

creedp wrote: »

For one thing it will be subject to tax on maturity - so the Govt will eventually get its pound of flesh. Also how do you differentiate between someone who has just started contributing to their pension and wont benefit from it for up to 40 years as against someone who is retiring in the next couple of years?

Realistically any hypothetical scheme will have to differentiate based on service/contributions and there will have to be some kind of formula to calculate the liability. Obviously the question them becomes who pays on behalf of the PS workers - does the NPRF take the hit or the taxpayer (private sector=employer/scheme/fund).

creedp wrote: »

You don't I suppose which just show how much or an excuse for a legitimate smash and grab it would be. Another issue here is the scale of the hit .. whatever about a 1% levy but if we're talking about a 40% levy on the maximum value of a pension pot payable now .. how the hell is comeone going to pay that? Get a loan? While I don't agree with the grabbing of bank accounts as being done in Cyprus .. at least the money is there now and not some future value of a zero present value.

Indeed, although the answer is in your question. The money taken out from private pensions never passed through my hands, it was paid out by the fund administrators (or at least I hope it was or I'm f**ked if the revenue come knocking).

But I agree any kind of massive wealth tax - let alone a 40% hit - outside of a national insolvency is totally unworkable.

More than the pension funds (which would be a fairly easy target), how will the farmer with 200 acres come up with €800,000 or the likes of Bewleys or Supermacs come up with several million? It'd be a case of the cure killing the patient.

shedweller

Jesus! If a cyprus bailout deal comes here, will we finally down tools and do something?

Godge

amacca wrote: »

This doesn't surprise me if its true



You assuming that is a fair outcome would be on a par with me assuming the homeless, those on social welfare and those without property are in that state because they are feckless and lazy etc

ie: ridiculous

Of course I will agree that it could well be argued that some of the homeless, social welfare recipients and those without property are feckless and lazy.

However, it is a fact that they are poor, don't own property, don't have wealth and that the tax (which I modified to 10-15%) would be fair in that it would not affect the poorest in society. Once again, what is wrong with that?

AlexisM wrote: »

Unfunded public sector pension of 20K pa (total pension 32K including state pension) ~ untouched by a 40% 'wealth' tax

Private cost to buy a 20K pension = 400K to 600K. Hit for 40% ~ leaving revised pension savings of 240K to 360K (but still soooper-dooper wealthy...) and revised pension of 12K-ish, for total of 24K vs. untouched public pension of 32K.

Fair? Really?

[And this has already been done here at a lower level with the 2.4% grab from private pension funds]

I never mentioned pension pots. Legislation now limits the size of pension pots so we could probably leave them alone. What would be more important would be to ensure that the wealth tax somehow captured trusts especially foreign trusts that hold Irish wealth on behalf of Irish citizens/residents.

As for the grab from pension funds, public service employees' pension funds are effectively grabbed by pay cuts (which reduce the value of their pensions as it is based on salary), the second of which is coming in July for many of them. This is even more true of those who have joined the new pension scheme since 1 January 2013.

creedp wrote: »

To be fair the Cyprus deal is a fact of life for them .. Godges's proposal is fantasy in the extreme .. e.g. there is no way in hell that a certain big farmer is Meath will be paying over 40% of his asset value to the Govt to pay off the debts contributed to by the financial sector who for a large part reside in the IFSC - ah there's the connection - he's also chairman of the IFSC as well as in receipt of some of the most shiny platinum public sector penions going.

Of course ignore him and his wealthy cabal and instead focus on the Guards so called €1m pension pot. Much more interesting and likely to keep the discussion going for a lot longer.

My idea was refined from a 40% grab to a 10-15% temporary tax repayable as a 40-year bond at 1% interest with the tax also allowed to be set off against future CAT. Essentially we would be refinancing our debt at 1% thanks to the patriotic (albeit forced) generousity of those who are wealthy in this country.

Of course it is a radical, socialist, left-wing idea that may not work but if it could be made to work, it would be much fairer than cutting social welfare or the pay of nurses, teachers and gardai.

hmmm

Godge wrote: »

Of course it is a radical, socialist, left-wing idea that may not work but if it could be made to work, it would be much fairer than cutting social welfare or the pay of nurses, teachers and gardai.

I presume by "fair" you mean the standard Irish definition of "someone else is paying and not me".

G Power

shedweller wrote: »

Jesus! If a cyprus bailout deal comes here, will we finally down tools and do something?

never give up hope

amacca

Godge wrote: »

Of course I will agree that it could well be argued that some of the homeless, social welfare recipients and those without property are feckless and lazy.

Just to be crystal clear...I wasn't actually saying/or arguing that the some or all of the above are feckless and lazy, I was saying I think its an idiotic notion, just as much as I think its an idiotic notion that its somehow fair to take 40% or even 10-15% of a persons deposits above 100k

I wasn't trying to infer that they are feckless and lazy either

Godge wrote: »

However, it is a fact that they are poor, don't own property, don't have wealth and that the tax (which I modified to 10-15%) would be fair in that it would not affect the poorest in society. Once again, what is wrong with that?

Just because something does not affect the poorest in society does not mean it is somehow fair....I liken that to the nonsensical "if it saves one life" mantra trotted out to justify all manner of ridiculous schemes and interference in peoples lives

To take an extreme imaginary example (which seems to be necessary in this case) lets say future Ireland is suffering from overpopulation so its decided that rich people (lets say oh they have over 500k in the bank) will only be allowed one child whereas if you have no assets you can go ahead sand ride all round ya......is this fair?

now lets flip that situation on its head......the demographers/geographers after some head scratching and some pencil pushing have seen that the "rich" people tend not to have as many kids as they consider how they will support them, the increased responsibilities, finding a suitable partner etc whereas its those with lesser assets tend to have large families they struggle to provide for ...so they decide to restrict those social welfare recipients to one child only and say to the richer citizens - off you go lads make us some babies...is this fair?

(never mind desirable in terms of long term outcomes in both situations)


What is wrong with the shaft those with over 100k in the bank imo is that it affects one group in society disproportionately .......the very definition of unfair I would have thought...its what I constantly hear when people talk about cutting social welfare etc

what is wrong with it as I see it is that this group may not actually be that deserving of even a now modified 10-15% cut in their assets, assets which have had tax paid on them....it could be a business account (a float for an sme)......it could be savings built up as the result of hard work and prudent investment etc...it could be a little nest egg for a cautious retiree etc ...I just dont think that someone with over a 100k in the bank is necessarily deserving of such a big overnight cut on tax paid money

I think if you put money on deposit in a bank you shouldn't have to worry about the principal....the fcuking things should be regulated and run properly and if the eu was going to share a common currency they should have exerted proper fiscal controls/central bank type structure to avoid wastrel populist politicians, regulators, developers, bankers and irresponsible borrowers aided and abetted by ratings agencies and faceless bureaucrats and finance hawks seemingly answerable to nobody running entire countries into the ground

And I think when the sh1t does hit the fan it shouldn't be some probably ordinary enough person with savings built up possibly over a long time with a view to investment in education/small business/their family etc who gets hit by 40% or 10-15% overnight on earned money with tax paid....leaving aside the justice of then asking them to pay increased tax and take a wages cut as well.

Godge wrote: »

As for the grab from pension funds, public service employees' pension funds are effectively grabbed by pay cuts (which reduce the value of their pensions as it is based on salary), the second of which is coming in July for many of them. This is even more true of those who have joined the new pension scheme since 1 January 2013.

I agree with your point here...I'm not anti public service at all, I happen to think they are being affected disproportionately too (in terms of more than just PR)....I am just vehemently anti raiding deposit accounts made up of earned money with tax paid on it already

Godge wrote: »

My idea was refined from a 40% grab to a 10-15% temporary tax repayable as a 40-year bond at 1% interest with the tax also allowed to be set off against future CAT. Essentially we would be refinancing our debt at 1% thanks to the patriotic (albeit forced) generousity of those who are wealthy in this country.

Of course it is a radical, socialist, left-wing idea that may not work but if it could be made to work, it would be much fairer than cutting social welfare or the pay of nurses, teachers and gardai.

hmmm.....no its too radical imo...........deposits should be sacrosanct....its something I just don't believe the goalposts should shift on

set a precedent like that imo...you have a generation of mistrusting the banks....I't would change investment patterns etc....maybe not a bad thing in the longterm but to overnight slash peoples investments with a promise of repayment and offsetting future tax

Godge

amacca wrote: »

Just to be crystal clear...I wasn't actually saying/or arguing that the some or all of the above are feckless and lazy, I was saying I think its an idiotic notion, just as much as I think its an idiotic notion that its somehow fair to take 40% or even 10-15% of a persons deposits above 100k

I wasn't trying to infer that they are feckless and lazy either

Good, unfortunately your analogy doesn't wash with me. It is an opinion that they are feckless and lazy. It is a fact that they are poor for whatever reason.

amacca wrote: »

Just because something does not affect the poorest in society does not mean it is somehow fair....I liken that to the nonsensical "if it saves one life" mantra trotted out to justify all manner of ridiculous schemes and interference in peoples lives

To take an extreme imaginary example (which seems to be necessary in this case) lets say future Ireland is suffering from overpopulation so its decided that rich people (lets say oh they have over 500k in the bank) will only be allowed one child whereas if you have no assets you can go ahead sand ride all round ya......is this fair?

now lets flip that situation on its head......the demographers/geographers after some head scratching and some pencil pushing have seen that the "rich" people tend not to have as many kids as they consider how they will support them, the increased responsibilities, finding a suitable partner etc whereas its those with lesser assets tend to have large families they struggle to provide for ...so they decide to restrict those social welfare recipients to one child only and say to the richer citizens - off you go lads make us some babies...is this fair?

(never mind desirable in terms of long term outcomes in both situations)


What is wrong with the shaft those with over 100k in the bank imo is that it affects one group in society disproportionately .......the very definition of unfair I would have thought...its what I constantly hear when people talk about cutting social welfare etc

what is wrong with it as I see it is that this group may not actually be that deserving of even a now modified 10-15% cut in their assets, assets which have had tax paid on them....it could be a business account (a float for an sme)......it could be savings built up as the result of hard work and prudent investment etc...it could be a little nest egg for a cautious retiree etc ...I just dont think that someone with over a 100k in the bank is necessarily deserving of such a big overnight cut on tax paid money

I think if you put money on deposit in a bank you shouldn't have to worry about the principal....the fcuking things should be regulated and run properly and if the eu was going to share a common currency they should have exerted proper fiscal controls/central bank type structure to avoid wastrel populist politicians, regulators, developers, bankers and irresponsible borrowers aided and abetted by ratings agencies and faceless bureaucrats and finance hawks seemingly answerable to nobody running entire countries into the ground

And I think when the sh1t does hit the fan it shouldn't be some probably ordinary enough person with savings built up possibly over a long time with a view to investment in education/small business/their family etc who gets hit by 40% or 10-15% overnight on earned money with tax paid....leaving aside the justice of then asking them to pay increased tax and take a wages cut as well.

Sorry, I just don't buy any of the bit in bold.

The simple premise of my proposal is that those who can afford to pay a wealth tax, pay it. Simple as is, of course, rich people won't like it or think it is fair. Of course the people with deposits of over 100k won't like it, of course people with a string of rental properties won't like it but hey they are rich, they can afford it.

amacca

Godge wrote: »

Good, unfortunately your analogy doesn't wash with me. It is an opinion that they are feckless and lazy. It is a fact that they are poor for whatever reason.

It is and has clearly been in the previous two posts my opinion that taking 10-15% (initially a proposed 40) off those with 100k in the bank is about as fair as the opinion that all social welfare recipients are feckless and lazy

I'm not at all sure what this has to do with the undeniable fact that poor people are poor (how could they be anything else after all if they weren't poor then they wouldn't be)...what point are you trying to make with this?

Godge wrote: »

Sorry, I just don't buy any of the bit in bold.

so you don't buy my statement below

Just because something does not affect the poorest in society does not mean it is somehow fair

you are having trouble with the idea that just because something does not affect the poorest in society it might somehow not be fair?

hmmm really......so, simple rule of thumb for fairness is fair = does not affect poorest in society ie: their conditions remain unchanged - the status quo remains

OK then try to imagine a society where poor peoples conditions stay exactly the same when those with over 100k in deposits suddenly have even 10-15% deducted off them overnight....people with over 100k in their a/c are not necessarily uber rich or super rich or even rich really........there are lots of them, they are the kind of people who provide services (not just public services) to the "poor", the kind of people who may just go out of business as the cannot now afford to pay their creditors - they may then go after their debtors aggressively to reclaim what they can etc just to stay in business


or do you want their position to improve? - because that is affecting them too and therefore whatever action is causing it will in your opinion unfair, frankly I'm confused how you could possibly not buy the bit you bolded in my post...

[not to mention the issue of how its fair that a person who goes out and works (in the private or public sector) to provide for a family and scrimps and saves for a rainy day over a lifetime gets hit with an overnight deduction in the value of his/her assets while Johnny I don't know what a Johnny is down the road can continue on with his social welfare funded lifestyle unmolested - perhaps johnny should be unmolested but so too should the saver......they should not be penalised for making what is a prudent decision to provide for themselves in the future by building up a nest egg etc - there simply is no fairness in that]

Godge wrote: »

The simple premise of my proposal is that those who can afford to pay a wealth tax, pay it. Simple as is, of course, rich people won't like it or think it is fair. Of course the people with deposits of over 100k won't like it, of course people with a string of rental properties won't like it but hey they are rich, they can afford it.

You seem to be confusing simple with fair

simple does not equal fair

in fact there may be an inverse relationship between the two - most simple plans are horrifically unfair to some parties - life is not black and white - its multiple shades of grey, there are many nuances even within broadly similar cohorts in a population - you implement a simple plan its a sure fire recipe for unfairness

BTW I understand the premise quite well, a simpleton would understand this simple premise.....but just because people it will directly affect wont like it or think its not fair does not mean they are wrong

ALSO: people with strings of rental properties may not fit into this thread, I have no issue with people who borrowed recklessly and are now feeling the pinch getting hammered - that was a bad business decision and one would assume if things were not going well the vast majority wouldn't have 100k in the bank.....they might either owe the bank significantly more or be about to............I have an issue with people who acted prudently to build up a modest pot of money and left it in a bank with a legitimate expectation that banks were properly run/managed/regulated getting part of it confiscated and someone saying this is fair because the poorest in society did not have to pay- after all how could they pay - they have no money?

and btw over 100k in deposits is not really rich - there are plenty of them out there - you start confiscating their money they start reacting in ways that are unpleasant for rich and poor and everyone inbetween alike imo - the whole house of cards is too interconnected

---

the only ones that will get away scot free will be the cute hoor brigade and the real uber rich...........now where is the fairness in that?

snaps

Just wondering, if a bank can take your money if it goes bankrupt, what would happen to your debts (mortgage, loan etc) is that wiped to?

makeorbrake

snaps wrote: »

Just wondering, if a bank can take your money if it goes bankrupt, what would happen to your debts (mortgage, loan etc) is that wiped to?

You know the answer to that one already snaps ;-)
..in this fair and equitable 'democratic' world we live in, they will take your savings but your debts will stand!

Godge

amacca wrote: »

It is and has clearly been in the previous two posts my opinion that taking 10-15% (initially a proposed 40) off those with 100k in the bank is about as fair as the opinion that all social welfare recipients are feckless and lazy

I'm not at all sure what this has to do with the undeniable fact that poor people are poor (how could they be anything else after all if they weren't poor then they wouldn't be)...what point are you trying to make with this?


so you don't buy my statement below

Just because something does not affect the poorest in society does not mean it is somehow fair

you are having trouble with the idea that just because something does not affect the poorest in society it might somehow not be fair?

hmmm really......so, simple rule of thumb for fairness is fair = does not affect poorest in society ie: their conditions remain unchanged - the status quo remains

OK then try to imagine a society where poor peoples conditions stay exactly the same when those with over 100k in deposits suddenly have even 10-15% deducted off them overnight....people with over 100k in their a/c are not necessarily uber rich or super rich or even rich really........there are lots of them, they are the kind of people who provide services (not just public services) to the "poor", the kind of people who may just go out of business as the cannot now afford to pay their creditors - they may then go after their debtors aggressively to reclaim what they can etc just to stay in business


or do you want their position to improve? - because that is affecting them too and therefore whatever action is causing it will in your opinion unfair, frankly I'm confused how you could possibly not buy the bit you bolded in my post...

[not to mention the issue of how its fair that a person who goes out and works (in the private or public sector) to provide for a family and scrimps and saves for a rainy day over a lifetime gets hit with an overnight deduction in the value of his/her assets while Johnny I don't know what a Johnny is down the road can continue on with his social welfare funded lifestyle unmolested - perhaps johnny should be unmolested but so too should the saver......they should not be penalised for making what is a prudent decision to provide for themselves in the future by building up a nest egg etc - there simply is no fairness in that]




You seem to be confusing simple with fair

simple does not equal fair

in fact there may be an inverse relationship between the two - most simple plans are horrifically unfair to some parties - life is not black and white - its multiple shades of grey, there are many nuances even within broadly similar cohorts in a population - you implement a simple plan its a sure fire recipe for unfairness

BTW I understand the premise quite well, a simpleton would understand this simple premise.....but just because people it will directly affect wont like it or think its not fair does not mean they are wrong

ALSO: people with strings of rental properties may not fit into this thread, I have no issue with people who borrowed recklessly and are now feeling the pinch getting hammered - that was a bad business decision and one would assume if things were not going well the vast majority wouldn't have 100k in the bank.....they might either owe the bank significantly more or be about to............I have an issue with people who acted prudently to build up a modest pot of money and left it in a bank with a legitimate expectation that banks were properly run/managed/regulated getting part of it confiscated and someone saying this is fair because the poorest in society did not have to pay- after all how could they pay - they have no money?

and btw over 100k in deposits is not really rich - there are plenty of them out there - you start confiscating their money they start reacting in ways that are unpleasant for rich and poor and everyone inbetween alike imo - the whole house of cards is too interconnected

---

the only ones that will get away scot free will be the cute hoor brigade and the real uber rich...........now where is the fairness in that?

I know a lot of people and I know a lot of people's financial situations and there are very few ordinary people with over 100k in deposits.

How long do you think it would take someone earning 30k a year to build up a bank deposit of 100k?
How long do you think it would take someone on social welfare to build up a bank deposit of 100k?

It is rubbish to sugest that someone with 100k on deposit in a bank is not rich. Hey, let's leave the guys with lots of money in the bank alone and take the shift money off the nurses out of college and the supervision money off the part-time teachers.

Of course there are anomalies, but it you are only hitting people with wealth of over 100k, they can afford to cope with the anomalies much better than a part-time teacher or a newly qualified nurse.

amacca

Godge wrote: »

Of course there are anomalies, but it you are only hitting people with wealth of over 100k, they can afford to cope with the anomalies much better than a part-time teacher or a newly qualified nurse.

I'm not saying the part-time teacher or the newly qualified nurse should get hit either...I don't think that would be fair ..... the question then becomes where should the money come from however

Godge wrote: »

How long do you think it would take someone earning 30k a year to build up a bank deposit of 100k?
How long do you think it would take someone on social welfare to build up a bank deposit of 100k?

It could take them a lifetime of scrimping and saving and being careful to build up a pot like that....it could have taken them years of running a business that provided employment to many people etc wheres the fairness in scalping them overnight for simply thinking that the principal they put into a bank should be untouched

even if you think it is fair to punish the prudent then there still remains the fact that this will have consequences for those without the 100k in the bank also

Godge wrote: »

I know a lot of people and I know a lot of people's financial situations and there are very few ordinary people with over 100k in deposits.

well if we are going to talk about people we know (and I know lots of peoples financial situations too) you would be surprised how many of them have substantial sums squirrelled away for a rainy day etc

shedweller

So when they take the money off us to bail out bondholders, what do they do with it? Put it in their bank accounts? If that is the case then the money never leaves the bank, right? So why not leave it where it is?
If they dont put it in their bank accounts, where do they put it? Invest in shares? So it ends up in someone elses account! The money never leaves the bank to work hard at some coalface! It never leaves the bank!
So why can't they do what they want to do with the money from where it is?

Godge

shedweller wrote: »

So when they take the money off us to bail out bondholders, what do they do with it? Put it in their bank accounts? If that is the case then the money never leaves the bank, right? So why not leave it where it is?
If they dont put it in their bank accounts, where do they put it? Invest in shares? So it ends up in someone elses account! The money never leaves the bank to work hard at some coalface! It never leaves the bank!
So why can't they do what they want to do with the money from where it is?

Who said that such a tax would be used in Ireland to bail out bondholders?

The suggestion I made for doing so would be to use the money to refinance the existing debt at a lower rate (1%) thus transforming current rich depositers and wealthy property barons into bondholders. A portion could be set aside to fund the budget deficit for the next two years in line with the IMF projected cuts thus meaning less income tax rises needed.

shedweller

But it's only a matter of time, surely? If SHTF then it's going to happen here and there will be many many reasons why it will be our "best chance" at economic survival. To take our money off us.

Godge

shedweller wrote: »

But it's only a matter of time, surely? If SHTF then it's going to happen here and there will be many many reasons why it will be our "best chance" at economic survival. To take our money off us.

Not at all, I don't think it will happen here.

We will continue on our current path, cutting the pay of teachers, nurses and gardai, reducing the scope of social welfare entitlements, putting extra taxes on the ordinary man (has anyone noticed no new taxes on large farmers since this started?). The combination of these measures will ensure that the budget deficit is closed and we won't need to go near those rich people sitting on hoards of gold, cash and property.

snaps

So banks reopening tommorrow, a limit of 300€ per withdrawl. Lets hope no one has bills to pay bigger than 300€!

sock puppet

makeorbrake wrote: »

You know the answer to that one already snaps ;-)
..in this fair and equitable 'democratic' world we live in, they will take your savings but your debts will stand!

There's nothing unfair about it at all really.

shedweller

http://rt.com/business/cyprus-deal-new-template-dijsselbloem-889/

A senior lawmaker told Reuters the Cyprus model may not be an isolated case, and is perhaps a future template in dealing with troubled European banks.

The new template is now likely to turn into a full-scale EU law, letting taxpayers off the hook in case a bail-out is needed, but imposing major losses on bigger savers on a permanent basis.

"You need to be able to do the bail-in as well with deposits," said Gunnar Hokmark, member of European Parliament, who is leading negotiations with EU countries to finalize a law for winding up problem banks, Reuters reported.

snaps

the Swiss banks will be busy.

darkhorse

sock puppet wrote: »

There's nothing unfair about it at all really.

Nothing fair about stealing peoples savings? You're having a fcuking giraffe.

darkhorse

Godge wrote: »

Not at all, I don't think it will happen here.

We will continue on our current path, cutting the pay of teachers, nurses and gardai, reducing the scope of social welfare entitlements, putting extra taxes on the ordinary man (has anyone noticed no new taxes on large farmers since this started?). The combination of these measures will ensure that the budget deficit is closed and we won't need to go near those rich people sitting on hoards of gold, cash and property.

Besides, Enda Kenny said it would'nt.:rolleyes:

View

darkhorse wrote: »

Nothing fair about stealing peoples savings? You're having a fcuking giraffe.

It would be better just to let the banks go bankrupt thus wiping out all the people's savings instead, would it?

Savers are creditors of a bank and, just like bond holders, they stand to get wiped out of a bank is let collapse (Savers effectively "loan" money to a bank and just like bond holders, they plan on getting their capital back plus interest payments).

In the Cypriot banking system collapse scenario, to cover the 100K deposit insurance scheme (covered by the Cypriot government that is) - which would have left those >100K savers suffering total loses on all their monies >100K - Cyprus would magically need to come up with an estimated 30 billion from somewhere (when they barely managed to come up with 7.5 billion via a special levy on those self-same savings). Do you know anyone who was offering to loan them that 30 billion to do so?

The issue for those >100K savers was "How much of a loss were they going to suffer?" not "Were they going to suffer one?"

Chips Lovell

Why are the people who get outraged about depositors getting burned always the same ones who're calling for senior bondholders to get burned?

G Power

Vladimir Kurtains wrote: »

Why are the people who get outraged about depositors getting burned always the same ones who're calling for senior bondholders to get burned?

because they're able to see that senior bondholders are generally the super rich bastards that are invited to bohemian grove and G8 summits and the likes and can take the hit where we cannot

Phoebas

G Power wrote: »

because they're able to see that senior bondholders are generally the super rich bastards that are invited to bohemian grove and G8 summits and the likes and can take the hit where we cannot

That's just the cartoon version of them.

Chips Lovell

G Power wrote: »

because they're able to see that senior bondholders are generally the super rich bastards that are invited to bohemian grove and G8 summits and the likes and can take the hit where we cannot

Really? You want to protect people with deposits in excess of €100,000? Even though depositors and senior bondholders rank the same as creditors? And even though ordinary punters with pensions might have part of them invested in bank bonds?

stevedublin

Vladimir Kurtains wrote: »

Really? You want to protect people with deposits in excess of €100,000? Even though depositors and senior bondholders rank the same as creditors? And even though ordinary punters with pensions might have part of them invested in bank bonds?

People generally view putting money in a bank account as the safest way of keeping money. Taking money from depositors is a serious breach of trust and breaks peoples perception that we are living in an organised, civilised society.

If people felt that they could lose money by keeping it in the bank then bank runs usually ensue and faith in the "system" collapses.

antoobrien

stevedublin wrote: »

People generally view putting money in a bank account as the safest way of keeping money. Taking money from depositors is a serious breach of trust and breaks peoples perception that we are living in an organised, civilised society.

If people felt that they could lose money by keeping it in the bank then bank runs usually ensue and faith in the "system" collapses.

The same applies equally to loans and bonds of all stripes. The difference being that "they're rich, they can afford to lose some money" until you find out that it's to the rich but the average Joe & Jane Soap's deposits and pension funds that was backing said bonds and loans.

Opps.

Chips Lovell

stevedublin wrote: »

People generally view putting money in a bank account as the safest way of keeping money. Taking money from depositors is a serious breach of trust and breaks peoples perception that we are living in an organised, civilised society.

If people felt that they could lose money by keeping it in the bank then bank runs usually ensue and faith in the "system" collapses.

Exactly. Nobody is disputing that. And that's why senior debt and deposits are so rarely touched. It's more the issue of why people want to burn one creditor and not another, when they're in the same class. In both instances, as anto said, there was the perception there that the money is safe as houses.

snaps

Seems people haven't had wages/pensions etc paid in either.

stevedublin

Vladimir Kurtains wrote: »

Exactly. Nobody is disputing that. And that's why senior debt and deposits are so rarely touched. It's more the issue of why people want to burn one creditor and not another, when they're in the same class. In both instances, as anto said, there was the perception there that the money is safe as houses.

I don't know the legalities of it but generally people who store money in banks on deposit are savers, many of whom may not be financially savvy.
On the other hand, people who buy bonds are usually professional investors who are (or are supposed to be anyway) financially savvy.

Chips Lovell

stevedublin wrote: »

I don't know the legalities of it but generally people who store money in banks on deposit are savers, many of whom may not be financially savvy.
On the other hand, people who buy bonds are usually professional investors who are (or are supposed to be anyway) financially savvy.

And that's why we have deposit protection schemes in place, where people with less than €100,000 get looked after. If you've more than €100,000 on deposit on a bank, then that's an investment. You aren't leaving it there as a current account or to save for your holidays. As I said earlier, often the people buying senior debt are pension and investment funds. Why should someone's pension fund take a hit when they may not even be wealthy enough to have €100K on deposit?

Nody

Vladimir Kurtains wrote: »

And that's why we have deposit protection schemes in place, where people with less than €100,000 get looked after. If you've more than €100,000 on deposit on a bank, then that's an investment. You aren't leaving it there as a current account or to save for your holidays. As I said earlier, often the people buying senior debt are pension and investment funds. Why should someone's pension fund take a hit when they may not even be wealthy enough to have €100K on deposit?

I have to agree; at those level it becomes like the Ankmorpok Assassin guild rule on contracts "You either know how to protect yourself or is rich enough to hire someone to protect you".

stevedublin

Putting any amount of money (including amounts > €100,000) on deposit in a bank is NOT considered an investment by most ordinary people who are not financial experts.

antoobrien

stevedublin wrote: »

Putting any amount of money (including amounts > €100,000) on deposit in a bank is NOT considered an investment by most ordinary people who are not financial experts.

Funny but as a child I was always told that putting £1 into savings was an investment in future sweets instead of buying 100 penny sweets today.

Was it a bit mean to say that to a 7 year old?

stevedublin

antoobrien wrote: »

Funny but as a child I was always told that putting £1 into savings was an investment in future sweets instead of buying 100 penny sweets today.

Was it a bit mean to say that to a 7 year old?

I never remember mothers saying that to children when I was young.

Chips Lovell

stevedublin wrote: »

Putting any amount of money (including amounts > €100,000) on deposit in a bank is NOT considered an investment by most ordinary people who are not financial experts.

So you get no return on six figure deposit? Funny how so many people wanted to put money in Cypriot banks in that case.

stevedublin

antoobrien wrote: »

The same applies equally to loans and bonds of all stripes. The difference being that "they're rich, they can afford to lose some money" until you find out that it's to the rich but the average Joe & Jane Soap's deposits and pension funds that was backing said bonds and loans.

Opps.

A list of Anglo's bondholders are at this link (may be a few years old):
http://www.irishcentral.com/news/List-of-bondholders-in-Anglo-Irish-Bank-leaked-110903209.html

I don't see where Joe or Jane Soap's names are.

I'm sure there are lots of ordinary people who are not banks/insurance companies/pension funds/other financial institutions who have money on deposit.

Comparing bondholders to depositors is utter nonsense!

Chips Lovell

And there are lots of ordinary people who give money to banks, pension funds and insurance companies. People who lose out if these institutions lose out.

That list of Anglo bondholders was long ago confirmed to be fake BTW.

stevedublin

well bundles of cash under the mattress time it is then!

Scofflaw

stevedublin wrote: »

A list of Anglo's bondholders are at this link (may be a few years old):
http://www.irishcentral.com/news/List-of-bondholders-in-Anglo-Irish-Bank-leaked-110903209.html

I don't see where Joe or Jane Soap's names are.

I'm sure there are lots of ordinary people who are not banks/insurance companies/pension funds/other financial institutions who have money on deposit.

Comparing bondholders to depositors is utter nonsense!

While the list is very much a careful creation (all Irish companies have been removed, for example, while junior bondholders have been included, even thought they were extensively toasted), the companies there are exactly the kind of companies that do things like look after pension funds, insurance funds, and the like. Joe and Jane Soap's name don't appear individually, but they'll have money in places like Allianz or credit unions.

cordially,
Scofflaw

shedweller

Open Bank Resolution is the new term designed to take even more of our hard earned money. But it's better, right?

https://www.youtube.com/watch?v=w5K-cEYwvcU

Amberman

View wrote: »

It would be better just to let the banks go bankrupt thus wiping out all the people's savings instead, would it?

I believe it would. Banks have been going bust since they were invented.

It would be painful to be sure for fools who put their money in risky banks that go bust, but its the best solution in the long run.

It would make people think very careful about where they deposited their money, it would spawn an industry of decentralised bank examiners, rather than dodgy rating agencies, so that only the strongest banks would attract deposits.

Cant understand a banks opaque off balance sheet liabilities? No problem, bank somewhere else! It would encourage transparency and simplicity in the banking syste, as well as mark to market accounting standards.

It would make people withdraw money from banks that take ridiculous risks or who use accounting gimmicks...thus putting the banking system back in its place, as a servant, and not a master of the people.

Nate--IRL--

Amberman wrote: »

I believe it would.

"We had to destroy the Village, in order to save it"

Nate

Amberman

Nate--IRL-- wrote: »

"We had to destroy the Village, in order to save it"

"We had to allow people to take responsibility for their careless actions in order to help them make better decisions going forward for themselves and society."

I like that better.

Bob_Latchford

why isn't there a public/nationalised alternative to private banks? Who dont leverage the deposit money out to risky investments (or investments with risk) but just offset it against national debt?