Governments raiding savings accounts to bail out banks

Cavehill Red

Victor wrote: »

You do realise that they have already gone after pension funds?

I do realise that. Bank deposits is a whole new ball game though, especially domestic bank deposits, and especially domestic bank deposits for all savings accounts, no matter what level of savings.
Any argument about getting those who can afford to pay (however just or unjust that may be in itself) goes out the window when the scalping shifts from pension funds and major deposits to 7% of everything on deposit across the board.

mickdw

Slydice wrote: »

Yeah, jaysus... sure begorrah, can you imagine like... if the government here... you know... took money from our savings?

Wouldn't that be raising DIRT*!?


[SIZE="1"]*"Deposit Interest Retention Tax (DIRT) rises by 3% to 33%"[/SIZE]

A smart arse reply, revenues links inserted all to prove your point, a point which has no relevance to the thread.

You need to have money for this to be an issue. In Ireland we are taking money from people who had no savings to save the banks.

Which is worse?

sock puppet

Cavehill Red wrote: »

Just thinking that there's always some people get screwed on the timing. Of course, the insiders will have redirected their wealth to Switzerland some time ago. But there's bound to be at least one poor b'stard who had liquidated their assets and gathered all of their savings together to try and fund a new life outside of Cyprus, and who just had their account hosed and is back stuck in the place now.

It wouldn't have taken much of an insider. There has been talk of something like this for some time, though I'm not sure whether many thought it would happen or affect everyone.

Cavehill Red

Deleted User wrote: »

You need to have money for this to be an issue. In Ireland we are taking money from people who had no savings to save the banks.

Which is worse?

Thing is, it's not actually an either/or. It's both. Cyprus will have to do all the same tax raising and expenditure cutting as us, and more as well as stealing people's bank savings.
What concerns me, apart from the Cypriot savers, is the precedent being set here. This is being done with the EU's permission, indeed probably at their demand. There's nothing to stop it being done here too.

imitation

Cavehill Red wrote: »

I do realise that. Bank deposits is a whole new ball game though,

Theres an element of "I don't have a pension" here too, I know this because I was thinking the same when the government pulled that number. I'm sure there were a lot of pissed off 50-60 years old though.

But yeah, getting hit in your savings account ? So much for buying that new car next week, or paying the gas bill, or sending jimmy to college. Mental, it will actually just cause a run on the banks !

Gatling

Cavehill Red wrote: »

indeed probably at their demand. There's nothing to stop it being done here too.

From all reports its was at there demand mainly the idea of the German government from fiance news reports,

If remember correct there was plans drawn up to deploy armed Garda and the army to try control possible runs on the banks here which its self is worrying,

Cavehill Red

I recall hearing the rumours to that effect, but I don't know if it was ever confirmed, even by a third party like the media.

VEN

unbelievable, really... hahahaha, unbelievable...

how did yer man Gadaffi go again? oh right.

was he talked out of that job?

oh right

keep it up now...

oppenheimer1

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.

Gatling

Cavehill Red wrote: »

I recall hearing the rumours to that effect, but I don't know if it was ever confirmed, even by a third party like the media.

It was let slip in a rte interview about the bank guarantee night it seems most people either missed or didn't take notice ,

Cavehill Red

Gatling wrote: »

It was let slip in a rte interview about the bank guarantee night it seems most people either missed or didn't take notice ,

I've no doubt whatsoever it was true, given the people I heard confirm it. But I never heard it stated publicly is all.

heartseeker

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 be 17bn"

ha what a laughable and lame excuse.I thought Ireland had the monopoly on being "a special case"
when IBRC went into liquidation this year and fine Gaels debt deal for our country fell through and it was therefore decided to bang the drum about a restructuring of debt onto our grandchildren.Yeah we soon found out just how special we were to the ECB.Seems to be an awful lot of "Special" unique" cases popping up over Europe.Im sure Greece,Portugal and Spain consider their situations special also indeed.17bn 100% of GDP??80 bn debt here in Ireland must have been around 300% of gross domestic product here not that anyone took notice.

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%???

hatrickpatrick

I am now absolutely certain that a major rebellion against the elite is an inevitability. Whether it turns violent or not remains to be seen.

I for one would be happy to lead such a charge. This has gone beyond insanity.

Cavehill Red

hatrickpatrick wrote: »

I am now absolutely certain that a major rebellion against the elite is an inevitability. Whether it turns violent or not remains to be seen.

I for one would be happy to lead such a charge. This has gone beyond insanity.

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.

Simply put the banks run out of money.

Meaning the deposits or a portion of them are gone. You can take money from people with no savings by taxing them to give the people who had savings their money back.

Or you can have the better off people with savings and bondholders/investors take a haircut.

Or you can mix both methods.


Moral hazard abounds either way. Personally I think it is grotesque to make someone with no savings pay money into someone elses deposit account via taxes or any other method. I`m no leftie either I believe in letting the market deal with it. Had we taken this route back in 2008 it would have shaken things up and we would have had heads on plates and reforms. Our current path was the one of least resistance and worse it is a circular path.

oppenheimer1

oppenheimer1 wrote: »

While the precedent set is dangerous, the Cyprus case is actually a very special situation.

The real precedent was set by Ireland in 2008. Deposit holders taking a haircut after a bank failure is the normal course of events.

morlock_

If the Cypriot government are taking money from bank accounts, does that mean the guarantee no longer applies?

suicide_circus

The EU - great bunch of lads.

stoneill

I Luv Crysis wrote: »

Couldn't realistically see the Irish rioting about this either, the people who WOULD actually riot - "Deco" and "Anto" from "Ballyer" are hardly gonna have enough savings to be affected. No.. yet again it will be middle-income earners, probably families married. both parents working, with 2 or 3 children who will take the hit.

At least Deco and Anto have the balls to protest, must be because they are always being put down just because they are from Ballyer.

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).