Cyprus surprise - Cypriot depositors to take a 'haircut'

antrobus

cepheus wrote: »

...Perhaps the depositors levy could have been made on all foreign deposits not resident in Cyprus by say 20%?

EU law insists that you don't discriminate between your own citizens and other EU citizens for one thing.

cepheus wrote: »

...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?

Because you're (a) Greek, and moved your money there to avoid getting hit if Greece left the Euro, or (b) because you're a Cypriot but resident somewhere else but intend returning some day, or (c) because you're a non-Cypriot employed in Cyprus, or ....

Not that it matters much. Certain Cypriot banks have always had - how shall we put it? - a certain 'reputation'.

antrobus

ChiefGrasscutter wrote: »

I think the Greek owned deposits are to be sold/transfered back to a Greek bank.

Hellenic Postbank, apparently.

ChiefGrasscutter wrote: »

...It also doesn't affect Greeks owning accounts in Cyprus.......because, well I don't know why. .

It doesn't effect Greeks owning deposits in local Greek branches of Cypriot banks, because Greece is going to take absorb both the assets and liabilities of the Cypriot bank branches.

John_Pierpoint

cepheus wrote: »

In contrast some Brits decided to live there, gained large tax advantages and they must have known that the economy was unable to support the banks.

http://www.reuters.com/article/2013/03/16/cyprus-bailout-greece-idUSL6N0C826A20130316

I would doubt that the majority of our citizens have any idea how the banking system works, even after 5 year of Global Financial Crisis; or should that be First World Financial Crisis ?

Assuming that the majority of the ex pats have "emigrated" and are not ready to scuttle back here at the whiff of an illness, can someone do a list comparing the UK fiscal code with that in Cyprus; fewer stealth taxes perhaps?

wymondham

ILW wrote: »

So the UK taxpayer will be subsidising a Cypriot bank?
Just seems to get madder and madder.

... and surely they will claim it all back from the Greek Government?

Mr_Mumble

Is Cyprus playing a game of chicken with Germany?

Vote on controversial deposit haircut postponed.

Faisal Islam, C4 News' excellent economics editor, retweeted this message yesterday:
Cypriots shd delay vote to Mon nite, lets see mkt reaction in London Mon am, maybe German bluff gets called this way?

Or, perhaps the Cypriot government don't have the votes to pass the measure. Either way it'll be an interesting 48 hours.

antrobus

John_Pierpoint wrote: »

http://www.reuters.com/article/2013/03/16/cyprus-bailout-greece-idUSL6N0C826A20130316

Interesting, if only because of the information that "Cypriot banks control almost 10 pct of Greek market". Which is presumably why Greece feels obliged to take on that particular obligation.

John_Pierpoint wrote: »

... I would doubt that the majority of our citizens have any idea how the banking system works, even after 5 year of Global Financial Crisis; or should that be First World Financial Crisis ?

I would doubt that the majority of any nation's citizens have any general knowledge of their national banking system, let alone the financial position of any particular bank, beyond what they need to know to conduct their daily financial business.

I imagine that the typical Cypriot had the same knowledge of the state of affairs of the nation's banking system as the typical Icelander did in 2008. Which is to say, what happened was a complete shock.

antrobus

Mr_Mumble wrote: »

Is Cyprus playing a game of chicken with Germany?

Vote on controversial deposit haircut postponed.

Faisal Islam, C4 News' excellent economics editor, retweeted this message yesterday:
Cypriots shd delay vote to Mon nite, lets see mkt reaction in London Mon am, maybe German bluff gets called this way?

Or, perhaps the Cypriot government don't have the votes to pass the measure. Either way it'll be an interesting 48 hours.

Goodness knows what would happen if the Cypriots baulk at the deal. Presumably, if the measure doesn't get passed on Monday, then every bank in Cyprus goes bust on Tuesday as soon as their doors open and the flood of account closures begin.

ILW

antrobus wrote: »

Interesting, if only because of the information that "Cypriot banks control almost 10 pct of Greek market". Which is presumably why Greece feels obliged to take on that particular obligation.



I would doubt that the majority of any nation's citizens have any general knowledge of their national banking system, let alone the financial position of any particular bank, beyond what they need to know to conduct their daily financial business.

I imagine that the typical Cypriot had the same knowledge of the state of affairs of the nation's banking system as the typical Icelander did in 2008. Which is to say, what happened was a complete shock.

The people running and overseeing the banks had very little idea either. Otherwise they would not have collapsed. It,s not as if any unforeseen natural disaster kicked to whole crisis off.

justme111

wotsthat wrote: »

Sorry you're confusing different risks. How are people led to believe that FSCS protects them against changes in tax and legislation? It just protects depositors if a bank is unable to meet it's obligations.

Splitting savings isn't intended to mitigate against the risk of tax and legislative changes.

If people thought they were 'covered' i.e. risk free then they were wrong.

It looks to me as if it were you who is confusing. So , you deposit £10000 and and then you are informed that there is no more ten grand there but ten pounds. Whether you call it tax or insolvency does not matter. Bank stil is not meeting its obligations.

HAMISH_MCTAVISH

justme111 wrote: »

It looks to me as if it were you who is confusing. So , you deposit £10000 and and then you are informed that there is no more ten grand there but ten pounds. Whether you call it tax or insolvency does not matter. Bank stil is not meeting its obligations.

If the government imposes a tax taken from your bank account, the bank's only obligation is to remove the money for the tax.

It does not have an obligation to defy the government on your behalf.