So much for €100,000 protection - Cyprus bailout

umop_apisdn

This is why I have very little of my money saved as electrons at a bank. This could be the beginning of the end.

EdGasket

umop_apisdn wrote: »

This is why I have very little of my money saved as electrons at a bank. This could be the beginning of the end.

Funky Nassau?
http://www.youtube.com/watch?v=L762HQ-ha7I

Lakeuk

Financial stocks will be getting a kicking come Monday, wonder if this will snowball and create a run on banks in Italy, Spain, Ireland etc...

jamesd

This looks like a really bad move for financial stability in the Eurozone because it's just been proved that depositor protection schemes can't be trusted to protect money. As we saw here when the FSCS protected only 90%, that creates a strong incentive to have a run when there's an increase in risk. Now from a whole country, not just one bank.

Some care is needed because while this is on bank accounts in the country it could be extended to bank accounts controlled by residents whatever country the money is in, so using non-cash methods maybe needed to provide protection. Even that won't suffice against a more determined approach on all somewhat liquid investments.

ColdIron

It's hard to see the difference between this and simple theft

It probably won't happen here anytime soon - though a dangerous precedent has been set - as we aren't asking for a EU bailout and currency devaluation is more our style, but it got me wondering

If you had a hunch it was upcoming and had a few days to prepare what would you do with cash in the bank - that part that wasn't fixed anyway? You could take it out as cash, OK if you only have a few grand but not feasible if you have £100k+. Property - not enough time. Gold and bonds - possibly. NS&I - the home of the beast. Other tangible assets - maybe if you're nimble enough but many are illiquid like property. What would you do?

jamesd

If it's a few days you've already left it too late. Don't be there in the first place is the way to go.

For those who want maximum safety that currently means avoiding bank deposits and other liquid investing in Cyprus, Greece, Portugal, Spain, Italy and Ireland.

Property outside the Eurozone is one possible approach. Not a liquid investment so less likely to be confiscated because it's not easy to take just part of it. But note the UK talk of a mansion tax and the possibility that taxes like that could be imposed on worldwide assets as well as just domestic ones, and on normal property, not just mansions.

You can be sure that politicians, bankers and regulators will lie if there is imminent risk, as they have done in the past, including in the UK, so you simply can't afford to trust their claims. Their objective will be to avoid a run and maximise the amount of money that can be collected.

If you have left it to the last moment, use electronic money transfers. There would be restrictions on cash withdrawing as soon as the inevitable run on cash starts and your objective would be to get the money out before the same was applied to electronic transfers. If leaving it late, have accounts at many banks so the amount being moved won't be as high as it would be if it was all at one, that'll reduce the chance of security checks or caps on amount blocking the transfers.

Glen_Clark

kidmugsy wrote: »

You've just told us what has become of Democracy - the electorate democratically voted repeatedly for the Blair/Brown government that ruined our public finances. Heavens, it didn't even repudiate the Labour government entirely in 2010.

The majority of those who voted did not vote for Blair/Brown (or Thatcher)
And nobody has voted for the Queen.

Glen_Clark

We would still have been better off keeping our savings in Cypriot Banks.
The Bank of England has helped themselves to twice as much of our savings through money printing*
And isn't it more honest to take it directly, like the Cypriots plan to do?
*Sterling about 20% down against the Euro since the Euro was introduced.

socrates

Glen_Clark wrote: »

We would still have been better off keeping our savings in Cypriot Banks.
The Bank of England has helped themselves to twice as much of our savings through money printing*
And isn't it more honest to take it directly, like the Cypriots plan to do?
*Sterling about 20% down against the Euro since the Euro was introduced.

You have a point - but its the way its been done - but then again there was no 'right' way to do it

I predict carnage next week on the markets

One other point I cannot see the Russians taking this lying down - in reality it is a direct attack on them

SaveTheEuro

ColdIron wrote: »

It's hard to see the difference between this and simple theft

The move is shocking and upsetting. But, on reflection, is it very different from other tax raising moves, such as the new property tax in Ireland or the massive rise in VAT in Greece?

Even in the UK it is difficult to avoid the additional national insurance, VAT and fuel duties. We are all paying.