MSE News: EU deal spares small savers in Cyprus from bailout tax

Perelandra

gadgetmind wrote: »

It's also right that those with <€100k get all their money back. Those with >€100k may mither at losing a fair chunk of their change BUT they knew this was the risk when they deposited (and then left!) their money in risky banks and decided that said risk was better than ... well, let's not speculate.

'tis a warning to us all, though...

If you sell a house (or for whatever reason have more cash you would normally have)... split it between institutions...

gadgetmind

Or at least don't put your money into a bank with a deeply dodgy balance sheet in a heavily indebted country!

zerog

sabretoothtigger wrote: »

The money will be worth 6% less in a year or so. Its swings and roundabouts, they are just stringing out the failure. That in turn seems to extending negative GDP

As Cyprus uses the (new) Deutsche Mark, it might not necessarily be worth 6% less. Maybe prices will rise by 6%, but they could still all move to Germany.

Glen_Clark

Perelandra wrote: »

'tis a warning to us all, though...

If you sell a house (or for whatever reason have more cash you would normally have)... split it between institutions...

I don't think thats necessary in Britain because the Government has got its own printer. You'll get your pounds back, they'll just be worth sod all.

Quietmanc

Don't have a go,I always read this board,but never post.From a non expert point of view,I would think that some Cypriots may well have €100k + deposits as life savings-not because they were greedy and risked all for the interest rates,but because they trusted the National banks years ago and stuck with them.Honest savers losing a third of their money cannot be correct.As for the Russian deposits in excess of €1M ,it seems it was possible to move money out of Russia,but maybe less possible to move out of a EU country!!

Glen_Clark

Quietmanc wrote: »

Honest savers losing a third of their money cannot be correct.

So who should compensate them?

SailorSam

There was someone on Tv this morning, i never caught the whole story but he was in the middle of moving house. They'd sold their old house but 'cos of a problem in the chain had gone into rented property for just a few weeks until their new house is ready. I think he said they had 200k waiting in the bank, and was waiting to find out just how much they were going to lose, but doubted they'd now afford a new house.

gadgetmind

Quietmanc wrote: »

I would think that some Cypriots may well have €100k + deposits as life savings-not because they were greedy and risked all for the interest rates,but because they trusted the National banks years ago and stuck with them

I'm sure there are people this naive/trusting/stupid, but I'm sure they are very much in the minority.

Honest savers losing a third of their money cannot be correct.

Those who took the simple precaution is keeping sub €100k per institution have lost nothing. Others will have learned a value lesson. Perhaps the price of this lesson was rather high, but when the advice was offered for free, they ignored it.

borisbathtime

My aunt could no longer afford to live in Cyprus and sold her small house there a few weeks ago for Euro150K. She was planning to return to UK and rent a small flat and use her house sale as her "pension" to live off.
The money went into a solicitors holding account and she is now being told she will have to take a large hit on that deposit before she receives it- how is that hitting the "fat cats" ?

gadgetmind

borisbathtime wrote: »

how is that hitting the "fat cats" ?

Who said it was supposed to do that? The bank(s) in question had lost more money than could be covered by their non-deposit capital structure. Where was the extra money to come from?

As it happens, wiping out the bond holders (senior and subordinated, and ordinary equity holders) has toasted a whole load of "fats cats" (what does that even mean?) as has hitting the >€100k deposits.