MSE News: Laiki Bank UK savers to escape Cyprus banking levy

Former_MSE_Helen

"Around 15,000 savers in the UK arm of Cypriot bank Laiki, will have their deposits protected under British rules..."

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Laiki Bank UK savers to escape Cyprus banking levy



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VT82

That doesn't seem fair. If it's just a branch, and not a ring-fenced subsidiary with its own banking license (e.g. Santander UK) you'd think anyone having a balance in a foreign bank above the £85k limit should be exposed to the parent company, in the same way the Laiki's Cypriot customers are?

Have I misunderstood the terminology, or is this really a 'bank error in your favour'? And if so, who's paying the price for it (besides the bank's Cypriot customers)?

innovate

Haven't read the detail but I think it's no different to those non-Brits who have their money transferred from Laiki to Bank of Cyprus in Cyprus. All the deposits below 100K Euros get transferred, that was the original deal.

talexuser

The implication of the article is that >100k € will not be affected and hence have no levy, but after the transfer only 100k € will be protected.

In that case it does seem unfair that they have escaped the levy - maybe the Cyprus legislation is not valid over here in the small print?

rochja

It seems to me that this is an example of a bank trying to give its customers the best deal it can in a financial crisis - in this case by transferring eligible accounts from one arm of the corporation into another. As money savers we should be cheering that at least some investors are being given a get-out-of-jail-free-card to escape a blatent piece of theft, not wishing them in the same stew as all the other poor s**s.
There may be a broader political dimension to this but I am glad that some people are getting to hang on to their assets

innovate

I didn't think that accounts > 100K would be transferred, but I might have misunderstood the announcement.

RetiredInThailand

rochja wrote: »

As money savers we should be cheering that at least some investors are being given a get-out-of-jail-free-card to escape a blatent piece of theft, not wishing them in the same stew as all the other poor s**s.

There is no theft. A couple of dodgy Cypriot banks have collapsed due to astoundingly bad management, bad government and various illegal practices. The signs that they were in a bad way have been written clearly on the wall for months if not years. It was only a matter of time before they collapsed.

In spite of this collapse being signposted very clearly, depositors have still had their funds protected up to 100KEUR entirely in accordance with EU rules. Those with larger deposits have not been protected, again entirely in accordance with EU rules. And that's it.

Anyone who didnt want to take the risk of depositing money with a dodgy Cypriot bank in return for a couple of extra % of interest has always been free to move his deposits to a more secure place. They chose not to. Now they are paying the price. Maybe they will learn a lesson.

talexuser

The whole tax evasion/money laundering financial system in Cyprus was nothing short of corrupt. News reports have millions of €s in loans to politicians and top people on the island written off with no interest ever paid to these banks on the books, let alone the dubious Russian money there. Everybody seemed happy with the arrangements while times were good.

It would be theft from the honest taxpayers of the rest of Europe to compensate millionaires for all the losses of a useless corporate management and political system. The system protecting 100k €s has worked ok - finally!

typistretired

I wonder what the Cyprus government think about this? It reminds me of the time the American bank snatched their UK deposits back to USA overnight.

talexuser

Postscript: the Cyprus Finance minister, just resigned, was last year the head of Laiki, the worst of the failed banks, and came up with the original plan to take 6.75% off small savers of the bank he used to run - tells you everything you need to know. Anyone for Fred Goodwin as Chancellor of the Exchequer?

Thrugelmir

VT82 wrote: »

If it's just a branch,

Every bank in the UK is required to operate under banking rules and legislation. No such thing as a branch. Will be a UK limited Company that reports to the FSA, BOE etc.