Cyprus surprise - Cypriot depositors to take a 'haircut'

RJP33

Mr_Mumble wrote: »

3. No vote in the Cypriot Parliament because wording has changed and there will be no 'tax'/'levy' imposed. The perversity of this is even starker when you consider the Dutch, Finnish and German parliaments will get to vote on this deal! Though, of course if the Dutch do vote the wrong way I'm sure the powers that be'll make them vote again until they get the correct answer or just change the wording a bit.

It's the EU, everyone will have noticed over the past few years that democracy has no place in it, especially people it'll directly affect.

mcfisco

Let's see what happens next, following the debacle over the last week or so, leading to some very insecure feeling depositors in some parts or Europe, it won't take much to tip Slovenia over the edge too.

armour

This week's shennanigans should focus the minds of southern european bank depositors. Not just individuals, but companies too. Why take a chance by keeping a >€100K balance anywhere within the national banking system?

So, where do you all think this enormous ammount of cash is going to end up?

Gold?
Other offshore accounts?
Nothern european accounts?
Non european accounts?
Equities?

antrobus

Thrugelmir wrote: »

Ebay is based in Luxembourg due to its 15% VAT rate.

Probably employs a dozen people to keep the accounts and forward the remaining cash onto the Cayman Islands.

If that. I think the eBay Luxembourg entity was just established for VAT purposes, and eBay Europe is based where it always was; in Switzerland. I'm not sure where eBay puts its money, but since it does own its very own bank in Luxembourg .....

antrobus

mcfisco wrote: »

Let's see what happens next, following the debacle over the last week or so, leading to some very insecure feeling depositors in some parts or Europe, it won't take much to tip Slovenia over the edge too.

There is also a high possibility that the country's three biggest banks -- Nova Ljubljanska banka (NLB), Nova Kreditna banka Maribor (NKBM) and Abanka Vipa -- will need fresh capital amounting to between 2 and 8 percent of Slovenia's gross domestic product (GDP), Moody's said.

http://www.spiegel.de/international/europe/ratings-downgrade-turns-slovenia-into-europe-s-latest-problem-child-a-848068.html

At least that's a shade less than 33% of GDP.

armour wrote: »

...So, where do you all think this enormous ammount of cash is going to end up?...

London. Or Zurich.

antrobus

Mr_Mumble wrote: »

Deal done. Major bulletpoints:

1. Likely 100% loss for Laiki bank deposits over 100,000 Euros (amounting to a total of 4.2bn Euros) .

2. Up to 40% loss for Bank of Cyprus deposits over 100,000 Euros

3. No vote in the Cypriot Parliament because wording has changed and there will be no 'tax'/'levy' imposed. ....

My best guess is that both the Bank of Cyprus and Popular Bank/Laiki are going into some Cypriot version of administration, thereby allowing the Cypriot authorities to effectively do what they like. Popular Bank/Laiki is going to be liquidated; Bank of Cyprus will carry on, but for how long I don't know.

HAMISH_MCTAVISH

Mr_Mumble wrote: »

Deal done. Major bulletpoints:

1. Likely 100% loss for Laiki bank deposits over 100,000 Euros (amounting to a total of 4.2bn Euros) .

2. Up to 40% loss for Bank of Cyprus deposits over 100,000 Euros

An awful lot of Cypriot small and medium businesses are finished then.

And no doubt tens of thousands of people will lose their jobs this week.

Still, I'm sure they'll be much happier losing their job as the economy crumbles around them than losing that few hundred Euros in a one-off tax....

CLAPTON

HAMISH_MCTAVISH wrote: »

An awful lot of Cypriot small and medium businesses are finished then.

And no doubt tens of thousands of people will lose their jobs this week.

Still, I'm sure they'll be much happier losing their job as the economy crumbles around them than losing that few hundred Euros in a one-off tax....

unlikely that they were the two alternatives

wotsthat

Generali wrote: »

Look at the fuss that is made when someone suggests that the Government live within its means. 'Dangerous extremists that threaten 100 years of progressive policies' or some such self serving rubbish.

Here's another lesson in what happens when the electorate keep voting for governments that spend more than they earn and 'invest' badly too. It's not as if we're being subjected to some sleight of hand - before each election politicians promise to borrow money to fund spending. It's the one promise we can absolutely count on them keeping.

Maybe this is a turning point. Probably not.

antrobus

Oh yes, and I've just realised that the whole point of the Bank of Cyprus and Popular Bank/Laiki 'restructuring' is that it is being done in a way that means that customers with less than 100,000 euros get 100% of their money, hence the deposit guarantee isn't triggered.Which is just as well, because Cyprus could not afford the 30bn euro cost.