Cyprus surprise - Cypriot depositors to take a 'haircut'

ILW

I could possibly see an argument where the cash taken was forcibly exchanged for equity in the bank. That would open the possibility of getting it back at some time in the future. This just seems wrong though.

EDIT: Just seen that that is what is happening.

John_Pierpoint

Riots UK style, organised via facebook, on Sunday, Monday and or Tuesday? The Turks in the poor legally unrecognised north must be enjoying their "schadenfreudegasm"?

ILW

Itr appears the run has already started with all night queues at the ATMs.

chris_m

ChiefGrasscutter wrote: »

It also doesn't affect Greeks owning accounts in Cyprus.......because, well I don't know why. But probably because they are the most likely to riot and trash/burn the place.
I'm suprised they don't also include !!!!!! and lesbos as a random minority group as also being excluded.

Lesbos is part of Greece anyway

ChiefGrasscutter

ILW wrote: »

I could possibly see an argument where the cash taken was forcibly exchanged for equity in the bank. That would open the possibility of getting it back at some time in the future. This just seems wrong though.

EDIT: Just seen that that is what is happening.

I have some vague memory of something similar being done in possibly sweden or another scandanavian country a long time ago.
We probably need poster 'Generali' - he'll know if it was indeed the case.

tesuhoha

I wonder how much of this money that has been 'taxed' is going to end up in bankers' pockets as million pound bonuses.

ILW

If shares are being issued in return and it is a substantial amount of the banks equity, things could get intersting if these forced shareholders decide to organise on such things as directors salaries etc.

antrobus

ChiefGrasscutter wrote: »

I have some vague memory of something similar being done in possibly sweden or another scandanavian country a long time ago.
We probably need poster 'Generali' - he'll know if it was indeed the case.

In July 1992 Italy’s Socialist Prime Minister Giuliano Amato imposed a one-off levy on bank accounts. It was a mere 0.6% in comparison with Cyprus’s scheme, and it still left a lasting scar on the country’s financial psyche. In 1936 Norway experimented with a bank deposit tax, but it caused an exodus of cash from the country.

http://www.edmundconway.com/2013/03/the-tragedy-of-cyprus/

Hat-tip to Mr Mumble (see above).

cepheus

I'm still wondering what else could have been done. Charge bondholders before deposit holders?

Perhaps the depositors levy could have been made on all foreign deposits not resident in Cyprus by say 20%? Why else would someone want a savings account in Cyprus (as opposed to a foreign version of the bank) if it wasn't to evade tax?

Perhaps the Cyprus finance minister didn't want a horses head on his pillow?

Masomnia

And apparently the government is going to compensate UK civil servants and military personnel. Not sure why!