Cyprus surprise - Cypriot depositors to take a 'haircut'

John_Pierpoint

Yes but unless we somehow restructure the zombie bank managements and their zombie borrowers, we are facing a lost decade like the Japanese.

It is well over 100 years since someone observed that there was no wage at which a man with a spade and a barrow can compete with a steam shovel and it is almost 80 years since the last depression between the two world wars. "The 1930s were not a period of depression but of industrial restructuring ?" .........Great West road ...Firestone building ....Gillette building ... new consumer lead recovery..... blah blah blah......
As I see it, how are we to invest enough capital to create jobs for the "unemployables", who have priced themselves out of a job?
If we are not careful the restructuring will happen, but the new jobs will be in Asia and managed by Chinese.

ChiefGrasscutter

The FSA deposit guarantee is not a debt placed on the taxpayer if it is called up.
The FSA levies a compulsory surcharge on all retail savings groups, including independent financial advisors as and where necessary to re-imburse the FSCS/FSA for any payouts the FSCS scheme has to make.
So the 'good' savings groups end up paying for the 'bad' and I suppose we the consumer end up paying though increased charges/higher mortgage rates/lower savings rates.

StevieJ

John_Pierpoint wrote: »

It is well over 100 years since someone observed that there was no wage at which a man with a spade and a barrow can compete with a steam shovel .

Not much good for turning over the average back garden

John_Pierpoint

Very good example - I challenge anyone to make minimum wage, working on an allotment (even with their own steam shovel).
It is generally accepted that a family needs at least 150 acres to make a viable farm unless it is all expensive greenhouses.

Graham_Devon

More announcements from Cyprus...

There is to be a weekly withdrawl limit imposed going forward. No one knows what the figure is, though you will never be able to take out large amounts of cash. Seems a bit weird, what happens if you want to buy a car or something?

Credit and debit cards may be refused on a whim by the bank. That is unless the transaction stays within the same bank. So if you are trying to pay for your goods at the shop, you may simply be declined as the bank the shop uses isn't the same as yours. Depends solely on the banks finances at the time.

In this free trade, free movement EU area, you will not be allowed to move money out of cyprus.

Cheques will not be cashed.

For those with fixed term deposits, when it gets to the end of the fixed term, you won't be able to access all of your cash.

So basically, total state control.

wotsthat

There's a run in progress right now - the government are trying to slow it down. If they don't they'll be recapitalising with Cypriot pounds or relying on German charity.

Will banks open Thursday? If they stayed closed they'd gain Easter weekend too.

Sit back, relax and hold tight.

CLAPTON

Graham_Devon wrote: »

More announcements from Cyprus...

There is to be a weekly withdrawl limit imposed going forward. No one knows what the figure is, though you will never be able to take out large amounts of cash. Seems a bit weird, what happens if you want to buy a car or something?

Credit and debit cards may be refused on a whim by the bank. That is unless the transaction stays within the same bank. So if you are trying to pay for your goods at the shop, you may simply be declined as the bank the shop uses isn't the same as yours. Depends solely on the banks finances at the time.

In this free trade, free movement EU area, you will not be allowed to move money out of cyprus.

Cheques will not be cashed.

For those with fixed term deposits, when it gets to the end of the fixed term, you won't be able to access all of your cash.

So basically, total state control.

A bit difficult to see any sensible alternatives until the dust settles.


Given the number of Cypriots in the UK I suppose the UK taxpayer could offer to bail out their banks and allow the Russians to exit with the money.
The numbers are relatively small; I believe 50 or 60 billion would help enormously.
However, although I know a number of Cypriots I won't be writing to my MP demanding UK action.

wotsthat

http://www.bbc.co.uk/news/business-21936366

Mr Osborne also revealed the government was in talks with Cypriot authorities to find a "British solution" regarding branches of Laiki Bank in the UK.

I could cry.

BobQ

wotsthat wrote: »

http://www.bbc.co.uk/news/business-21936366



I could cry.

http://www.guardian.co.uk/money/2013/mar/25/uk-laiki-bank-customers-business-as-usual

I think they already have ......

Mrs_Bones

Graham_Devon wrote: »

More announcements from Cyprus...

There is to be a weekly withdrawl limit imposed going forward. No one knows what the figure is, though you will never be able to take out large amounts of cash. Seems a bit weird, what happens if you want to buy a car or something?

Credit and debit cards may be refused on a whim by the bank. That is unless the transaction stays within the same bank. So if you are trying to pay for your goods at the shop, you may simply be declined as the bank the shop uses isn't the same as yours. Depends solely on the banks finances at the time.

In this free trade, free movement EU area, you will not be allowed to move money out of cyprus.

Cheques will not be cashed.

For those with fixed term deposits, when it gets to the end of the fixed term, you won't be able to access all of your cash.

So basically, total state control.

If I was there I'd just be withdrawing the maximum amount allowed each week until all my money was withdrawn. Do they seriously think people won't do that just because they impose a limited. They might be able to turn a bank run into a bank stroll but either way I think the majority of people will have lost all trust in their banking system and be aiming to remove as much as possible. They haven't solved the problem, just delayed it.