So much for €100,000 protection - Cyprus bailout

worldtraveller

It has emerged that British savers could be hit by bank restructures in Cyprus. Laiki Bank, which has three UK branches - one in Birmingham and three in London - is not covered by the FSA compensation scheme, unlike Bank of Cyprus.

This is due to a technicality - whereas the Bank of Cyprus UK is a fully blown subsidiary, Laiki's British presence is via branches of the main, Cyprus-based bank. This means British savers in Laiki will get the same deal as their Cypriot counterparts - meaning any deposits more than €100,000 could take a devastating hit of as much as 40pc.

Telegraph.co.uk

mark55man

worldtraveller wrote: »

It has emerged that British savers could be hit by bank restructures in Cyprus. Laiki Bank, which has three UK branches - one in Birmingham and three in London - is not covered by the FSA compensation scheme, unlike Bank of Cyprus.

This is due to a technicality - whereas the Bank of Cyprus UK is a fully blown subsidiary, Laiki's British presence is via branches of the main, Cyprus-based bank. This means British savers in Laiki will get the same deal as their Cypriot counterparts - meaning any deposits more than €100,000 could take a devastating hit of as much as 40pc.

Telegraph.co.uk

I'm sorry - that is not a technicality - that is a fundamental part of their operating model, and a fundamental part of the risk analysis that should have been done.

Higher return's come with higher risk - which (unfortunately) has now happened. If the government wants to waste tax payer's money by subsidising moral hazard, then fine - doesn't make it any less wrong to expect a free ride on the international (pira)seas

cepheus

No, please no...where does it end? #UK taxpayer to underwrite £160mlln loan to support Caribbean #taxhaven http://shar.es/e94Nl

#Taxhaven of Turks & Caicos far from alone in being bust – so are #Jersey, #Guernsey and the #IsleofMan http://shar.es/e9CIe

astalavistab

britons who have saving in Cypriot banks should consider the situation since "It has emerged that British savers could be hit by bank restructures in Cyprus" telegraph says.

cepheus

Can it really be true that the Christian name of the #Cyprus central bank governor is Panicos?

JohnRo

Don Panicos?

atush

the IOM is considerably closer to having a balanced budget than the UK is. And they aren't bust. Their economy is growing and has done the last 5 years.

Jersey is closer, but not bust yet. Their economy is still in the toilet, and unlike the IOM they spent all their surplus.

Have no idea abt Guernsey.

Glen_Clark

CLAPTON wrote: »

but letting banks fail means that ordinary people ....... lose all their savings.

AFAIK nobody did when the Icelandic banks failed.
They just bailed out ordinary depositors.
Which cost a lot less than the British way of bailing out everybody.
Which could yet bankrupt the country, not just the banks.

innovate

Glen_Clark wrote: »

Which could yet bankrupt the country, not just the banks.

Given that the banks are said to have [paper] assets of about 8 times the GDP, when the banks are bust, the country is. And to all intents and purposes, the banks are now bancrupt.

Glen_Clark wrote: »

They just bailed out ordinary depositors

I don't know how you define 'ordinary', but I do know that Iceland only bailed out icelandic citizens. Though they probably didn't have to fear the russian m a f i a, just Gordon Brown's polite warnings that this would be considered terrorism.

Glen_Clark

innovate wrote: »

I don't know how you define 'ordinary', but I do know that Iceland only bailed out icelandic citizens.

Britain could have done the same. That might have been affordable. At least the cost would have been calculable. As it is, new black holes are being discovered in the bank's balance sheets almost daily, and Osborne is throwing taxpayers borrowed money at the housing market to keep prices high and protect the banks from negative equity. (Which is all pumping up the housing benefit bill as well) When this borrowed money should not be invested in anything that doesn't produce exports. If they had admitted the true scale of liabilities from the start, it might have been enough to deter even Brown & Darling from bailing them all out. Then Sir Fred Goodwin etc may not have got their payoff.