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Cyprus surprise - Cypriot depositors to take a 'haircut'
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Shushannah wrote: »My mother is retired in Cyprus. Any ideas what to advise her as she is living off her savings there?
Well, she's almost certainly going to find her bank balance is reduced by 6.75%.
In practical terms: does she have enough cash? The banks are closed for the holiday weekend, the ATM network is very flakey. Does she have enough cash to buy groceries and put petrol in her car, if not does she have enough food in the house to be able to stay home until, say, late next week? The banks are likely to be overwhelmed when they re-open on Tuesday so she needs a plan to take beyond that when things should be clearer.
In the longer term she needs to consider where, and how, she wants to hold her money but for now deal with the immediate issues. It'd be worth keeping an eye on the expat forums for her part of the island [Eastern Cyprus, Paphos People, Cyprus Living]. That should tell her when the banks start to operate again normally.
Mands0 -
To a degree it seems like a good idea. Putting cash in a bank should be seen as an investment rather than a risk free exercise.
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A a shareholder I agree but not for depositors.
Deposits aren't investments.
Without those depositor funds the system wouldn't operate."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
The big money is not German, EU, or Cypriot, think Russian oligarchs and M@fia. They have the big bucks (about half of the total) hidden in these banks. Imagine bailing out those guys. Cyprus is used a tax haven.0
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grizzly1911 wrote: »A a shareholder I agree but not for depositors.
Deposits aren't investments.
Without those depositor funds the system wouldn't operate.
Deposits are loans to a bank. So not risk free as banks can and do fail.
But regardless, this is a tax, and we know governments can and do implement unexpected taxes. Or even seize assets.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
The big money is not German, EU, or Cypriot, think Russian oligarchs and M@fia. They have the big bucks (about half of the total) hidden in these banks. Imagine bailing out those guys. Cyprus is used a tax haven.
In which case only amounts over the previously 'guaranteed' amount should have been hit.0 -
downshifter98 wrote: »In which case only amounts over the previously 'guaranteed' amount should have been hit.
This is a tax, not a bank default.
Taxes can be levied on all amounts in a bank account.
The UK government could do the same thing here any time it chose.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Deposits are loans to a bank. So not risk free as banks can and do fail.
But regardless, this is a tax, and we know governments can and do implement unexpected taxes. Or even seize assets.
Desperate times do, of course, call for desperate measures - but after months of trying to convince everybody that normal service is being resumed this totally undermines confidence for a fairly piddling amount (relatively talking). Upto now I've actually thought that somehow the Euro project would pull through but not now; these are the actions of madmen and we have to walk away.0 -
Tabloids may take notice now :P , from Sky's economics editor:
https://twitter.com/EdConwaySky/status/312977812376154112Cyprus deposit grab will hit many UK service personnel stationed there. Inc soldiers currently in Afghanistan, acc to one who contacted us - Ed Conway (@EdConwaySky)"The state is the great fiction by which everybody seeks to live at the expense of everybody else." -- Frederic Bastiat, 1848.0 -
If you were a Spanish or even Italian saver , how would you react to this ? I can see Hoards of people taking out as much as they can in cash once the weekend is over .. I really am beginning to think this may well be a watershed moment ... A massive gamble by the E.U ..0
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Scary times for the average Joe who does not really understand this (me!). Now makes me nervous that now despite having crap interest for years on my savings I may now have them legally looted?
Hopefully you'll all be along to tell me why Cyprus is different and it wouldn't/couldn't happen here!! (please!)
encouragement to save takes another knock! - I'm looking for a shoebox as we speak!0
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