Cyprus surprise - Cypriot depositors to take a 'haircut'

BlondeHeadOn

HAMISH_MCTAVISH wrote: »

Yes.

Effectively you would check your account on Monday morning and your new balance would be £9325, down from £10,000 on Friday.

Or down to £90,100 on Monday from £100,000 on Friday if you have 100K or more in savings.

I'm not surprised that the Cypriot people are in shock. I have just worked out that if this happened to my bank in the UK I would lose c. £3,500 - and the reduction would take my balance down below the minimum limit for the higher interest rate I get on these savings so I would lose out twice!

Scary stuff....

Graham_Devon

HAMISH_MCTAVISH wrote: »

Yes.

Effectively you would check your account on Monday morning and your new balance would be £9325, down from £10,000 on Friday.

Or down to £90,100 on Monday from £100,000 on Friday if you have 100K or more in savings.

Scary stuff.

Wanted to get it straight as I'm wondering why this has only been imposed on Cyprus?

Why not Spain / Greece?

The bailout terms seem varied dependent on the country which seems a little unfair? Spain seemed to get away with the most.

epz_2

Wookster wrote: »

UK depositors seem to be the second hardest hit after Russians. It seems that they will lose between £200 & £250million!

UK depositors avoiding uk tax by any chance?

if so screw them.

IMHO its still not too late so do something like this on a smaller scale to the Iceland/isle of man deposits we rescued for free.

Mrs_Bones

Many people have lost trust in the banking system as it is. Isn't this just going to do more damage. If people take fright in other countries that are in trouble such as Greece and Spain etc and decided they would sooner take their money out of the bank and stuff it under their mattress so to speak, won't that just make all the problems so much worse? As this seems to set a precedent isn't it likely to start a run on some banks.

Graham_Devon

The more I think about this, the more distasteful I find it.

Why should those with some savings have to bail out the reckless borrowers, banks and the EU?

Many of these people will just be completely normal folk. Tey won't be investors, borrowers and in may cases won't have been involved in the gambling, yet they are the ones paying the biggest price?

MASSIVE gamble for the EU. The inequality of it all is simply shameful.

HAMISH_MCTAVISH

epz wrote: »

UK depositors avoiding uk tax by any chance?

if so screw them.
.

More likely to be UK pensioners retired over there, and British Expats working in Middle East/North Africa that use Cyprus as their European home. I know a lot of Gulf Air/Emirates/Etihad pilots/engineers that do so, for example.

Graham_Devon

We can't get out of the EU quick enough......

cepheus

This is because they are exposed to Greece and Cyprus asked the Russians to bail them out because they hold a lot of their dodgy money there. 10% for a money launderer sounds like a good deal, but not if you are bone fide!

You may remember that along the way during the crisis, Cyprus has sought aid from Russia, which was unusual. Well the reason for that is that (Island of) Cyprus is a place where Russians are believed to do a lot of money laundering, which involves parking cash in Cypriot banks.
What's stunning about Saturday's bailout is that depositors with over 100K euros in a Cypriot bank will see a 10 percent tax instantly before banks reopen on Tuesday.

That will infuriate domestic savers, and it will mean that a lot of Russian oligarchs/mobsters/money launderers/etc. will take big hits.

http://www.businessinsider.com/cyprus-bailout-russian-angle-2013-3?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+businessinsider+%28Business+Insider

antrobus

Shock in Cyprus as savers wake up to bailout levy
http://www.bbc.co.uk/news/world-europe-21814325

cepheus

British Depositers might be unaffected

From the FT:

Quote: What does the bail out mean for UK depositors?
By Patrick Jenkins, Banking Editor

Customers of the UK units of Cyprus’s banks probably have nothing to worry about, according to people close to the situation.

The British subsidiary of Bank of Cyprus said depositors’ money would be unaffected by the haircut being applied to accounts operated by its parent company. Subsidiary structures, which hold ringfenced capital and funding and are more tightly supervised by local regulators, offer greater legal protection in this kind of incidence.

It is less clear whether UK customers of the other main Cypriot bank, Laiki – formerly known as Marfin – will be similarly protected. Laiki operates as a branch in the UK, rather than a segregated subsidiary. However, people close to the situation suggested it, too, was confident that customers in the UK would not be hit by the haircut decision.