Governments raiding savings accounts to bail out banks

tin79

shopaholic01 wrote: »

I saw this earlier, for once in my life I'm glad I'm broke! Up to 9.9% of your savings taken in one chunk - that's got to hurt:eek:.

Thats great logic. You would rather have zero than €100 which is taxed down to €90?

Maybe thats why you are broke I guess.

clairefontaine

The Swiss and Lichetenstein banks must be loving the Euro crisis.

Cavehill Red

Cavehill Red wrote: »

A former Provo once said to me that he reckoned the global economy and banking sector would be reformed overnight if there was a sudden spate of sniper assassinations committed on central bankers, oligarchs and private bankers like the Rothschilds. He said he regretted that people like him had spent so much time shooting other people like him, be they loyalists or British squaddies, when the whole time they should have been aiming for billionaires.
I'm not endorsing an assassination campaign, but it was definitely food for thought. People might not be so insistent on beggaring entire nations to replenish their lost speculative investments if they believed there was a risk of dying as a result.

I find it mindboggling that governments are the ones raiding people's bank accounts, pensions, and taking stupid decisions to prop up failing businesses - and people are still talking about "those evil bankers".

Phill Ewinn

OP forgets the Irish national pension fund got pissed up against the wall with these banks too.

Grayson

heartseeker wrote: »

Its being reported on BBC 5 live that the Cypriot parliament has reacted furiously to the decision from Brussels to take 20% from every bank account in the country.So which is it...9% or 20%???

Neither. It depends on how much you have.

http://www.guardian.co.uk/world/2013/mar/16/cyprus-savings-levy-imposed-eurozone

People with less than 100,000 euros in their accounts will have to pay a one-time tax of 6.75%, Eurozone officials said, while those with greater sums will lose 9.9%. Without a rescue, president Nicos Anastasiades said Cyprus would default and threaten to unravel investor confidence in the eurozone. The Cypriot leader, who was elected last month on a promise to tackle the country's debt crisis, will make a statement to the nation on Sunday.

People rushed to banks and queued at cash machines that refused to release cash as resentment quickly set in. The savers, half of whom are thought to be non-resident Russians, will raise almost €6bn thanks to a deal reached by European partners and the International Monetary Fund (IMF). It is the first time a bailout has included such a measure and Cyprus is the fifth country after Greece, the Republic of Ireland, Portugal and Spain to turn to the eurozone for financial help during the region's debt crisis. The move in the eurozone's third smallest economy could have repercussions for financially overstretched bigger economies such as Spain and Italy.

suicide_circus

Cavehill Red wrote: »

I'm not endorsing an assassination campaign, but it was definitely food for thought. People might not be so insistent on beggaring entire nations to replenish their lost speculative investments if they believed there was a risk of dying as a result.

I would rarely endorse violence myself but i think you certainly have a point here. A tiny elite group of high ranking politicos, civil servants and financial technicians (99% unelected) have such an unbelievable level of control over the economic fate of entire nations and every decision they take is calculated to benefit them and theirs to the detriment of the ordinary citizen and his liberty.
I woud shed not one tear if some enterprising snipers got to work and started "removing" a small number of individuals at the decision making levels when grossly immoral decisiona like this were taken.

bluewolf wrote: »

I find it mindboggling that governments are the ones raiding people's bank accounts, pensions, and taking stupid decisions to prop up failing businesses - and people are still talking about "those evil bankers".

By "bankers" perhaps they mean those in the ECB and IMF who essentially tell governments what to do

Dwork

mickdw wrote: »

I genuinely fear for the whole european banking system after hearing this. People will be pulling their money out of the banks in large chunks and could well bring the whole thing crashing down.

We have a tax on homes that are bought with tax paid money. I can see a tax on tax paid savings coming here too.

What if our government see a trend re money walking out of the banks. What is the next step for government - limits on withdrawals?

They'll probably call it somthing jazzy like DIRT. I have a cunning plan to deal with this, I'm going to keep my money in other peoples bank accounts. I'm also going to invest in Cadburys Creme eggs, stockpile them in the basement and then return them for a full refund when the threat has passed. Everyone knows they go up in value every year.

Funny when it happens to the Cypriots, people notice. Lots of Irish savers had their savings taken enmasse when they shut down the IBRC a short while back. I didn't hear so much as a squeak from the "people". Very much setting a precedent though. If you take 9% now, sure why not another 9% in a years time? Only if they "really" need it though, obviously. Fackers.

lau1247

suicide_circus wrote: »

I would rarely endorse violence myself but i think you certainly have a point here. A tiny elite group of high ranking politicos, civil servants and financial technicians (99% unelected) have such an unbelievable level of control over the economic fate of entire nations and every decision they take is calculated to benefit them and theirs to the detriment of the ordinary citizen and his liberty.
I woud shed not one tear if some enterprising snipers got to work and started "removing" a small number of individuals at the decision making levels when grossly immoral decisiona like this were taken.



By "bankers" perhaps they mean those in the ECB and IMF who essentially tell governments what to do

after the systematic removal, then they gotta go and spend more money on the man hunt etc , you get the gist of it... kidding of course.. love the username though..

on a serious note though, is this technically legal because it is not a tax but rather a straight 'daylight robbery' by government on what is legally obtained money (Fully taxed from income etc)??

AckwelFoley

They can happily raid my bank and take 9.9 or even double it off what I have in there.

My mortgage.

demag2001

This should serve as a warning to all the trendies who think the cashless society is the way to go. At least with cash they can't physically put their hands in your pocket or in your stash (yet).

clairefontaine

If I had any money I'd take it out and buy a stable currency like Swiss Francs and invest in silver.

Sergeant

Cavehill Red wrote: »

A former Provo once said to me that he reckoned the global economy and banking sector would be reformed overnight if there was a sudden spate of sniper assassinations committed on central bankers, oligarchs and private bankers like the Rothschilds. He said he regretted that people like him had spent so much time shooting other people like him, be they loyalists or British squaddies, when the whole time they should have been aiming for billionaires.
I'm not endorsing an assassination campaign, but it was definitely food for thought. People might not be so insistent on beggaring entire nations to replenish their lost speculative investments if they believed there was a risk of dying as a result.

It isn't food for thought. You don't go around killing people to make a political statement. Ridiculous stuff quite frankly.

wexie

Sergeant wrote: »

.... You don't go around killing people to make a political statement...

Seems to me politics have historically been a rather common reason to go around killing people...

PeadarCo

I hope people realise that when a bank isn't bailed out depositors lose all their money not just 6-9% of it. Also for those complaining about protecting bondholders etc this bailout was in part due to the fact that private holders of Greek bank debt had to take a haircut i.e. bondholders got burnt. Some of these bondholders who got burnt were Cypriot banks who had invested in Greece. Its the reason they are protected as ultimately the cost is burn by the person on the street in some shape or form.

I also hope those who are complaining about this aren't also advocating burning senior bondholders in Ireland as due to the legal situation senior bondholders can't be burned without depositors suffering the same fate here.

Grayson

Sergeant wrote: »

It isn't food for thought. You don't go around killing people to make a political statement. Ridiculous stuff quite frankly.

I think he means it's strange how it would have that much effect. rather than kill, just imagine they were somehow removed from their positions and exiled somewhere crappy.

Although, I think he's wrong. Others would take their places. It's not like there wouldn't be plenty of people willing to take risks for billions.

I Luv Crysis

Are bit coins the only safe place to store your cash these days ? Seems to be the only currency governments and banks have no control over.

Grayson

I Luv Crysis wrote: »

Are bit coins the only safe place to store your cash these days ?

Well, except for hackers.

Sergeant

Grayson wrote: »

I think he means it's strange how it would have that much effect. rather than kill, just imagine they were somehow removed from their positions and exiled somewhere crappy.

Although, I think he's wrong. Others would take their places. It's not like there wouldn't be plenty of people willing to take risks for billions.

Who are they? The real villains of the piece are the socialist bureaucrats in Brussels and Strasbourg who insist on meddling in everything to the ruination of their fellow European citizens.

It's easy and convenient to blame bankers and other supposedly shadowy groups for all this.

Banks are being banks. It's government that is causing this.

Augmerson

Gatling wrote: »

Simple tell them I'm a loan parent feck it id even throw on a skanger dress if be one ugly mother,
I've 50 kids now pay me ,meeeeeee bratzzz are bleeeeeedin starrrrrvin

My mother was a lone parent, and we did plenty fine without social welfare, so why don't you drop the ****ing stigma against single parents? My parents didn't plan for things to not work out between them but these things happens. They still did the best job they possibly could for me and my brother and sisters.

ArmaniJeanss

oppenheimer1 wrote: »

While the precedent set is dangerous, the Cyprus case is actually a very special situation. The Cypriots themselves have estimated that to bail out their banks would cost €17bn, equivalent to almost 100% of their GDP. Their banks require a bailout because of their exposure to Greece, and the losses imposed on them. Additionally, the Cypriots have a savings to GDP ratio somewhere north of 240%. This is far larger than Germany or Ireland which have ratios of about 120%. Cypriot savings were holding steady at a value of about 60% of GDP until the early nineties, when the value of deposits in their banks exploded. Many believe that much of this is hot Russian money. Non-Cypriot nationals account for just under 40% of all deposits but this doesn't include Cypriot companies controlled by foreigners which make up another significant chunk.

The reason for the expropriation of deposits is that it will raise about €6bn allowing the Cypriot government to borrow only €10bn to save their banks. This is an amount which is just about sustainable. The reason expropriation in this instance is clever is that it shifts a large chunk of the burden onto foreigners who were using Cyprus lax regulation to launder money, thus meaning EU citizens won't be paying for the whole bailout. Another reason that this method was used is that it would be politically impossible to for northern European governments to bail out Cypriot banks that have a large number of questionable characters on their books.

This begs the question as to why they didn't just limit the 6.75 (or 9%) charge to accounts of non-Cypriots (or of nonEU citizens). Or exclude accounts held in an individual name with a domestic address (as opposed to accounts held in a company name/address).

Or set a lower limit of say a years average industrial wage on an individuals primary account only, below which the charge doesn't apply.

Because if the real reason and the really big money was in going after the Russians and the big savers, then whats the logic behind going after the person who got their months already taxed salary of €1500 paid into their account on Friday and taking another €100 from it?

IsaacWunder

Less than three weeks ago:

Government announces end of bank guarantee | RTÉ News

A coincidence, maybe?

Interestingly, the Cypriot deposit insurance scheme covers all bank deposits up to €100,000 (same as Ireland's) but that isn't stopping them bringing this in and grabbing 6.75% of the savers' money.

Moral of the story: deposit insurance or none, your money isn't safe in a Eurozone bank.

WoollyRedHat

oppenheimer1 wrote: »

While the precedent set is dangerous, the Cyprus case is actually a very special situation. The Cypriots themselves have estimated that to bail out their banks would cost €17bn, equivalent to almost 100% of their GDP. Their banks require a bailout because of their exposure to Greece, and the losses imposed on them. Additionally, the Cypriots have a savings to GDP ratio somewhere north of 240%. This is far larger than Germany or Ireland which have ratios of about 120%. Cypriot savings were holding steady at a value of about 60% of GDP until the early nineties, when the value of deposits in their banks exploded. Many believe that much of this is hot Russian money. Non-Cypriot nationals account for just under 40% of all deposits but this doesn't include Cypriot companies controlled by foreigners which make up another significant chunk.

The reason for the expropriation of deposits is that it will raise about €6bn allowing the Cypriot government to borrow only €10bn to save their banks. This is an amount which is just about sustainable. The reason expropriation in this instance is clever is that it shifts a large chunk of the burden onto foreigners who were using Cyprus lax regulation to launder money, thus meaning EU citizens won't be paying for the whole bailout. Another reason that this method was used is that it would be politically impossible to for northern European governments to bail out Cypriot banks that have a large number of questionable characters on their books.

The reason such expropriation is unlikely in the near to medium term here, is that A) our banks are now well capitalised, They still have significant depositors from other European countries.

While I think you make a very good point, they have still gone and undermined confidence elsewhere, and capitalism needs trust to survive. People will be paying attention, and even with what you said above, they will be very nervous now. Bank Run's don't hold much in the way of rationality, it usually is a mass panic.. in the case of Cyprus though it's obvious to see why people were running to the ATMS. With things being so uncertain these days, don't think this is a good a move in terms of the bigger picture ( plus if they are worried about people launduring money in their banks, why don't Cyprus and co. actually attack the problem at its root?

Park Royal

Cyprus joined the EU in 2004......

are they not required to operate the same Money Laundering legislation as

the rest of the EU......

So .....what have the various EU bodies being doing about Money Laundering

since 2004......sitting on their hands........

Each financial institution should have a Money Laundering Officer...

if Cyprus is full of Hot Russian money etc.......is the EU just hot air.....?.

suicide_circus

Sergeant wrote: »

It isn't food for thought. You don't go around killing people to make a political statement. Ridiculous stuff quite frankly.

Leaders of terrorist organizations and dictators are assasinated pretty frequently. These just happen to be economic terrorists/dictators.

suicide_circus

Sergeant wrote: »

Who are they? The real villains of the piece are the socialist bureaucrats in Brussels and Strasbourg who insist on meddling in everything to the ruination of their fellow European citizens.

It's easy and convenient to blame bankers and other supposedly shadowy groups for all this.

Banks are being banks. It's government that is causing this.

Agree with a lot of that but as i said earlier, people use the word "bankers" to refer to those in any financial institution including ECB and IMF which i would certainly class as shadowy

Dante

Park Royal wrote: »

Cyprus joined the EU in 2004......

are they not required to operate the same Money Laundering legislation as

the rest of the EU......

So .....what have the various EU bodies being doing about Money Laundering

since 2004......sitting on their hands........

Each financial institution should have a Money Laundering Officer...

if Cyprus is full of Hot Russian money etc.......is the EU just hot air.....?.

I think it has long since been proven that the powers that be within EU are completely incapable of practicing what they preach with regards to such regulation. Appointing a money laundering officer or anything similar would just mean yet another pointless title which would more than likely do nothing more than issue the odd 'careful now' every now and then and then to try weasel out of any accountability when the shít hits the fan.

Ostrom

bluewolf wrote: »

I find it mindboggling that governments are the ones raiding people's bank accounts, pensions, and taking stupid decisions to prop up failing businesses - and people are still talking about "those evil bankers".

I find it equally confusing that the events of the past five years have brought nothing home about the relationship between state policy and private capital

Sarn

Dwork wrote: »

Funny when it happens to the Cypriots, people notice. Lots of Irish savers had their savings taken enmasse when they shut down the IBRC a short while back. I didn't hear so much as a squeak from the "people". Very much setting a precedent though.

But the deposits in IBRC are being covered under the deposit guarantee scheme, linky.

I think the key issue is that deposits for individuals below the DGS limit of €100k in Cyprus are being targeted. This flies in the face of the European Commission's approach to depositor protection and maintaining the confidence of depositors (DGS). What's the point of a guarantee if it's not honoured?

While unfortunate, it is understandable that those with savings in excess of €100k will have to take a hit.

ilovesleep

For so long there was so much blame thrown upon our backs. Even about 2 or 3 weeks ago, a german man was in the papers and there was a thread in boards.ie, politics/irish economy forum about it, pretty much saying we are the makers of our own mess and to suck it up now and swallow our bitter pills and hand up our bare arses for scalping. Don't get me wrong here, ireland fcuked up in many ways - first of all in the way we led the boom, and secondly then in the crash or downturn and we'll have to take responsibility for our part.

We fcuked up. But how come is it, others are in the same boat too? Our problems are going so much more deeper than what went on here in our country. Especially considering many more countries are in the same boat too - banking problems, deficit problems, unemployment problems. The problem is univerisal with no univerisal solution. Just univerisal taxes upon our individual backs which won't get to the root of the problem and fix it and we'll continue to stagnate and get deeper into re

Phill Ewinn

ilovesleep wrote: »

For so long there was so much blame thrown upon our backs. Even about 2 or 3 weeks ago, a german man was in the papers and there was a thread in boards.ie, politics/irish economy form about it, pretty much saying we are the makers of our own mess and to suck it up now and swallow our bitter pills and hand up our bare arses for scalping. Don't get me wrong here, ireland fcuked up in many ways - first of all in the way we led the boom, and secondly then in the crash or downturn and we'll have to take responsibility for our part.

We fcuked up. But how come is it, others are in the same boat too? Our problems are going so much more deeper than what went on here in our country. Especially considering many more countries are in the same boat too - banking problems, deficit problems, unemployment problems. The problem is univerisal with no univerisal solution. Just univerisal taxes upon our back which won't get to the root of the problem and fix it and we'll continue to stagnate and get deeper into recession.

You do know that people are making massive profits from these deals? You don't think people are around the place wrecking economies for no reason?

http://mobile.bloomberg.com/news/2012-11-19/shadow-banking-grows-to-67-trillion-industry-regulators-say.html

noodler

Cavehill Red wrote: »

Does anyone seriously think that our government, a government which would tax your house and your water, wouldn't dip into your savings too?
Are you going to do anything to protect your savings in case they take action here, or are you confident it'll never happen?

As unprecidented as the savings levy is, most Western Countries have property and water taxes - they aren't exactly unprecidented.

Cavehill Red

bluewolf wrote: »

I find it mindboggling that governments are the ones raiding people's bank accounts, pensions, and taking stupid decisions to prop up failing businesses - and people are still talking about "those evil bankers".

Unboggle your mind by asking yourself on whose behalf are the government doing these things?

Wanderer2010

I have savings in Post Office and my bank, should I be getting genuinely worried or is this just scaremongering??

I Luv Crysis

Sarn wrote: »

While unfortunate, it is understandable that those with savings in excess of €100k will have to take a hit.

Is it understandable really? Punishing people sensible enough to put some cash away for the future. What about people who owe money, say €5,000 credit card debt - will they now owe €6,000 ? Don't think so. The messages seems to be get yourself personally as heavily indebted as possible to fund your unsustainable lifestyle and we won't touch you, be sensible and put some cash away and we'll swoop and in and take a hefty chunk away as punishment for....saving money?

I Luv Crysis

Wanderer2010 wrote: »

I have savings in Post Office and my bank, should I be getting genuinely worried or is this just scaremongering??

It's unlikely to happen here any time soon, our economic situation and bailout terms and conditions are a lot different than Cyprus.

DublinWriter

I Luv Crysis wrote: »

It's unlikely to happen here any time soon

Laughing. My. Balls. Off.

Plenty of people said the same about property tax, income levies and water charges.

This is one of the most economically callous things I've ever seen any government do outside of some of the most corrupt African states.

It is going to unleash a financial ****-storm starting at 7.00am GMT tomorrow when a Europe-wide run on the banks will commence as people realise the full import of what has just happened in Cyprus.

It also is interesting in terms of the cultural difference between Germany and the rest of Europe - ever since WW2 Germans have hoarded money and never trusted banks; it's the main reason we have a €500 note.

Sarn

I Luv Crysis wrote: »

Is it understandable really? Punishing people sensible enough to put some cash away for the future. What about people who owe money, say €5,000 credit card debt - will they now owe €6,000 ? Don't think so. The messages seems to be get yourself personally as heavily indebted as possible to fund your unsustainable lifestyle and we won't touch you, be sensible and put some cash away and we'll swoop and in and take a hefty chunk away as punishment for....saving money?

I agree, it is crappy, the prudent should not be punished, but the guarantee is/was up to €100k. There was a risk that everything over that could have been wiped out when the banks failed. An individual with more than that could have spread it around a few financial institutions if they wanted to minimise losses, which in Cyprus' case would only have helped so much.

clairefontaine

I Luv Crysis wrote: »

It's unlikely to happen here any time soon, our economic situation and bailout terms and conditions are a lot different than Cyprus.

This is going to spread like a plague across Europe. It is EU/Brussels sanctioned theft. No two ways about it.

username123

clairefontaine wrote: »

This is going to spread like a plague across Europe. It is EU/Brussels sanctioned theft. No two ways about it.

Absolutely agree. Prepare for financial chaos in the days ahead. This is EU sanctioned theft of money that people have already paid tax on. Anyone with any kind of substantial savings would do well to get that money out of an institution that the government can lay their hands on.

charlemont

I have relatives in Cyprus and Cypriots are far more hot headed than Irish folk, There will be blood on the bankers there yet. I just can't see them tolerate this.

KyussBishop

Wanderer2010 wrote: »

I have savings in Post Office and my bank, should I be getting genuinely worried or is this just scaremongering??

I don't think there is immediate worry for us right now, but if there is even a hint that we might need help again in the future, then there is now a greater risk of bank-runs.

I Luv Crysis

DublinWriter wrote: »

Laughing. My. Balls. Off.

Plenty of people said the same about property tax, income levies and water charges.

This is one of the most economically callous things I've ever seen any government do outside of some of the most corrupt African states.

It is going to unleash a financial ****-storm starting at 7.00am GMT tomorrow when a Europe-wide run on the banks will commence as people realise the full import of what has just happened in Cyprus.

It also is interesting in terms of the cultural difference between Germany and the rest of Europe - ever since WW2 Germans have hoarded money and never trusted banks; it's the main reason we have a €500 note.

I said happen here any time soon, as in Ireland. Think about this, why would it happen here, what sequence of events would lead to the EU ordering our government to dip into personal deposits? As of last week we are fully financed up to the end of 2014 - but don't let facts like that get in the way of sensationalist scaremongering.

Dwork

Sarn wrote: »

But the deposits in IBRC are being covered under the deposit guarantee scheme, linky.

I think the key issue is that deposits for individuals below the DGS limit of €100k in Cyprus are being targeted. This flies in the face of the European Commission's approach to depositor protection and maintaining the confidence of depositors (DGS). What's the point of a guarantee if it's not honoured?

While unfortunate, it is understandable that those with savings in excess of €100k will have to take a hit.

No, they're not. They didn't burn the bondholders, but they did burn the depositers.:) Soo, save really hard and get burnt, save not so hard and you're grand? Say for example if I have more than 100k on deposit, it gets used to pay wages, forthcoming bills, tax bills etc. I should get burnt because I saved too much? Nice logic.

Sarn

Sarn wrote: »

While unfortunate, it is understandable that those with savings in excess of €100k will have to take a hit.

"They have more than me take it off them" may be understandable, but in no way right or excusable nor a good policy.
Saving is what is needed, not discouraging it.

Turtyturd

Instead of giving them the money, can we lend them some of our* savings, and make them repay them at extortionate rates, and if they fail to do that maybe throw them out of their houses or have them locked up?

*By our I obviously mean people who have savings.

Dwork

Turtyturd wrote: »

Instead of giving them the money, can we lend them some of our* savings, and make them repay them at extortionate rates, and if they fail to do that maybe throw them out of their houses or have them locked up?

*By our I obviously mean people who have savings.

I see where you went wrong there.

ashers222

Turtyturd wrote: »

Instead of giving them the money, can we lend them some of our* savings, and make them repay them at extortionate rates, and if they fail to do that maybe throw them out of their houses or have them locked up?

*By our I obviously mean people who have savings.

I thought that's what the SSIA scheme was all about. "give us your money for five years and we'll repay with lots of interest!"

Sarn

Dwork wrote: »

No, they're not. They didn't burn the bondholders, but they did burn the depositers.:) Soo, save really hard and get burnt, save not so hard and you're grand? Say for example if I have more than 100k on deposit, it gets used to pay wages, forthcoming bills, tax bills etc. I should get burnt because I saved too much? Nice logic.

Under the DGS deposits of up to €100k are being covered. It is not right that individuals with savings over €100k are losing out while bondholders get off scot free, it should be applied equally. Again, the protection in place is up to €100k, diversify your assets to minimise a loss. I understand this may not be feasible when running a small business.

bluewolf wrote: »

"They have more than me take it off them" may be understandable, but in no way right or excusable nor a good policy.
Saving is what is needed, not discouraging it.

No, it's not a case of 'they have more than me, take it off them'. Anyone putting their money in a financial institution should be aware of what cover is in place. In the case of EU countries it is €100k. If they are not happy, then they should move it or spread the risk. I don't agree with the policy, but that is the policy in place.

Fair enough - misunderstood your post

Dwork

Sarn wrote: »

No, it's not a case of 'they have more than me, take it off them'. Anyone putting their money in a financial institution should be aware of what cover is in place. In the case of EU countries it is €100k. If they are not happy, then they should move it or spread the risk. I don't agree with the policy, but that is the policy in place.

Mmmmum, but if they sneakily pop in and stick a midnight tax on your (let say)€12k of 6 - 20%, then it doesn't really matter what level of depositor cover is in place. People lodge money to get interest of between 0.1 and 4%, bit of a waste of time if the state than whips away 6%. Or do you not "get" this issue?