Cyprus: Big Depositors Could Lose Up To 60 Percent

[JDGRUEN]

Didn't it say "Deposits up to 100,000 euros are safe and will be paid out to customers, but only 40 percent of deposits exceeding that amount are certain to be paid out in full" in the OP?

Yes, hopefully that means those that are not bogus or crooks will not lose too much.

This is a disaster - everyone should read much more in depth about this ... When a governmental can by fiat take money from private - personal bank accounts - then we are all in a very serious situation. And the small account holders are being hurt ...

Explain how small deposits of less than 100k are impacted. Banks fail all the time and I am very familiar with both failures and deposit insurance or guarantees. Not disagreeing, just asking for explanation.

"everyone should read much more in depth about this" ... there is plenty to read ... check it out and see ...

[Naam]

nice try to hide lack of knowledge.

[JDGRUEN]

Due to the European Commission's threat of a forced levy on bank deposits instead of a hoped for bailout and due to the government of Cyprus and Banks folding to the EU coercion, ordinary Cypriot citizens were not able to access the money in their bank accounts for more than a week - both individuals and small businesses alike. Then had their deposits raided if under some magic amount of 100K Euros. The big money Russians had a back door to take out their billions while banks were closed in Cyprus ... What is left for the people of Cyprus is a total financial train wreck. Many small businesses will likely fold in the coming weeks and months

http://coppolacomment.blogspot.com/2013/03/sowing-wind.html

...there has been a slow run on Cypriot banks for some time now, as international depositors withdrew funds due to bailout fears: I expect this run to increase to a flood once banks re-open after the bank holiday.

The effect of large and small depositors removing funds on that scale will be a brutal economic downturn as the money supply collapses. In particular, the dominant financial sector will suffer a severe contraction, putting thousands of jobs at risk and paralysing lending to Cypriot households and businesses. And that is IN ADDITION to the estimated 4.5% economic contraction that is already happening due to austerity measures imposed on Cyprus in 2012 to reduce its fiscal deficit, and the further measures required in this bailout.

**Edited for Fair Use**

Edited April 1, 2013 by Scott
Edited for fair use

[JDGRUEN]

nice try to hide lack of knowledge.

No. it is just an attempt to get people to read the particulars of event instead of quoting their education and experience laurels... This event has set a precedent of taking depositors money by EU Commission fiat - a very unsettling event. And the citizens of Cyprus, who did not cause the problem, are going to suffer a great deal. The below 100K threshold is a contrivance that will be of little help to the business economy and the job situation in Cyprus which will be hurt badly.

Edited April 1, 2013 by JDGRUEN

[F430murci]

This article places Cyprus bank issue into perspective.

http://www.nytimes.com/2013/04/01/business/global/calculating-impact-of-cypruss-bank-bailout.html?pagewanted=all&_r=0

Calculating the Impact of Cypruss Bailout
By LANDON THOMAS Jr.
Published: March 31, 2013

WHAT are the implications of the huge losses 60 percent that the Cypriot bailout is imposing on the biggest depositors of that countrys two largest banks?
Related

As Banks in Cyprus Falter, Other Tax Havens Step In (April 1, 2013)
The magnitude of the losses, disclosed late Friday and confirmed Saturday by Cypriot officials, has provoked concern that depositors in second-tier euro zone banks in Slovenia and Italy might withdraw their savings from those institutions.

Edited April 1, 2013 by metisdead
: Edited as per fair use.

[Pakboong]

Perhaps fractional reserve banking is on the outs after some 500 years.

[F430murci]

Perhaps fractional reserve banking is on the outs after some 500 years.

Fractional lending is here to stay, at least in US. Fed is not going anywhere. Unfortunately, tighter regulation is still needed. Banks should not be allocating large portions of their portfolio to high risk investments, CDOs or junk bonds. That is for hedge fund investors and there is a reason hedge funds are for qualified accredited investors. Issue of very poor regulation and trying to cover high interests paid to encourage large deposits from foreign investors.

Edited April 1, 2013 by F430murci

[thaibeachlovers]

Didn't it say "Deposits up to 100,000 euros are safe and will be paid out to customers, but only 40 percent of deposits exceeding that amount are certain to be paid out in full" in the OP?

Irrelevant. If the government can steal from accounts with over 100,000, what is to stop them stealing it from accounts with less? They make the rules. I'm sure that no one is putting more money into accounts, regardless of the amount, so it will backfire on the banks and the govt. in the long run.

In the UK, I only had a bank account because my pay was direct deposited, and I thought it was safer than my mattress. Why bother when we were getting 0% interest?

[pinfold]

Good place to buy a place in few months time,looked there a couple of years ago,be giving them away soon

[Gulfsailor]

Funny how everyone is blaming the EU and ECB on depositors losing money. The facts are a little different though;

People and companies from outside Cyprus put their money in the hands of a bank in a tiny country because of tax reasons and high interest rates. That bank doesn't know what to do with all this money, so start buying Greek bonds, Greece being their big brother. Greece goes nearly bust, although saved by EU taxpayer money. The Cypriot bank is overexposed to Greek crisis, so will collapse. All depositors will loose all money initially and curators will step in to see what can be salvaged to pay creditors, including the depositors. The Cypriot government guarantees first 100,000 Euro, so will have to fork out that amount, coming out of the 300,000 or so Cypriotic tax payers' wallet. Result; Cyprus bust, depositors lose nearly all, Cypriotic residents screwed.

Now the EU together with the IMF step in to offer help. But no way they can 'paying for Cyprus' past party lifestyle' sell to their own taxpayers. More so knowing that 60% of the money involved is not even from EU people or companies, but dubious Russian money. So EU and IMF say fine; we will bailout your banks for 10 billion (likely more to be needed), but in return you need to come up with 5 billion yourselves. So Cyprus went to Russia to ask for the money. Problem was that they already got money from Russia a year earlier, so they wouldn't help anymore. So Cyprus had no choice but to go along with the haircut of deposits. Mind though that these depositors will be getting shares in the bank back for it.

All the fuss about governments stealing money from depositors is pure BS, and just rhetoric from large companies and criminals looking at losing some of their tax avoidance money parked offshore. You don't see any riots in Nicosia. Why you think that is?!

Without the ECB and the IMF much, much more money would have been lost.

Lesson to learn; don't park your money in a tax haven whose economy is only a fraction of its banks' debt. And if you do, make sure it's at least in a country with strict banking rules and preferably can count on some backup from larger economies for whatever reasons (the Euro currency in this case), so you won't lose all your money if the shit hits the fan.

Ps. Wait for Slovenia, then Luxemburg to go. And after that all those tiny off shore havens! Give it 3 more years and then finally we will see an end to this 'banking' crisis that started exactly 5 years ago.

[F430murci]

Funny how everyone is blaming the EU and ECB on depositors losing money. The facts are a little different though;

People and companies from outside Cyprus put their money in the hands of a bank in a tiny country because of tax reasons and high interest rates. That bank doesn't know what to do with all this money, so start buying Greek bonds, Greece being their big brother. Greece goes nearly bust, although saved by EU taxpayer money. The Cypriot bank is overexposed to Greek crisis, so will collapse. All depositors will loose all money initially and curators will step in to see what can be salvaged to pay creditors, including the depositors. The Cypriot government guarantees first 100,000 Euro, so will have to fork out that amount, coming out of the 300,000 or so Cypriotic tax payers' wallet. Result; Cyprus bust, depositors lose nearly all, Cypriotic residents screwed.

Now the EU together with the IMF step in to offer help. But no way they can 'paying for Cyprus' past party lifestyle' sell to their own taxpayers. More so knowing that 60% of the money involved is not even from EU people or companies, but dubious Russian money. So EU and IMF say fine; we will bailout your banks for 10 billion (likely more to be needed), but in return you need to come up with 5 billion yourselves. So Cyprus went to Russia to ask for the money. Problem was that they already got money from Russia a year earlier, so they wouldn't help anymore. So Cyprus had no choice but to go along with the haircut of deposits. Mind though that these depositors will be getting shares in the bank back for it.

All the fuss about governments stealing money from depositors is pure BS, and just rhetoric from large companies and criminals looking at losing some of their tax avoidance money parked offshore. You don't see any riots in Nicosia. Why you think that is?!

Without the ECB and the IMF much, much more money would have been lost.

Lesson to learn; don't park your money in a tax haven whose economy is only a fraction of its banks' debt. And if you do, make sure it's at least in a country with strict banking rules and preferably can count on some backup from larger economies for whatever reasons (the Euro currency in this case), so you won't lose all your money if the shit hits the fan.

Ps. Wait for Slovenia, then Luxemburg to go. And after that all those tiny off shore havens! Give it 3 more years and then finally we will see an end to this 'banking' crisis that started exactly 5 years ago.

Exactly. The crux of article I posted. The deposit insurance issue is sketchy sounding, but if trying to save banks I get it and there is a lot more going on here than we can glean from a few articles. The 40% above insured losses may be reasonable in a bank failure. Again, we dint have all the facts and seems like a lot of speculation out there. Will take time to sort out.

[Credo]

I think there is a difference between investing your money in a high risk fund and depositing it in a bank. Just who regulates these banks? Who wasn't keeping an eye on this?

[JDGRUEN]

Funny how everyone is blaming the EU and ECB on depositors losing money. The facts are a little different though;

People and companies from outside Cyprus put their money in the hands of a bank in a tiny country because of tax reasons and high interest rates. That bank doesn't know what to do with all this money, so start buying Greek bonds, Greece being their big brother. Greece goes nearly bust, although saved by EU taxpayer money. The Cypriot bank is overexposed to Greek crisis, so will collapse. All depositors will loose all money initially and curators will step in to see what can be salvaged to pay creditors, including the depositors. The Cypriot government guarantees first 100,000 Euro, so will have to fork out that amount, coming out of the 300,000 or so Cypriotic tax payers' wallet. Result; Cyprus bust, depositors lose nearly all, Cypriotic residents screwed.

Now the EU together with the IMF step in to offer help. But no way they can 'paying for Cyprus' past party lifestyle' sell to their own taxpayers. More so knowing that 60% of the money involved is not even from EU people or companies, but dubious Russian money. So EU and IMF say fine; we will bailout your banks for 10 billion (likely more to be needed), but in return you need to come up with 5 billion yourselves. So Cyprus went to Russia to ask for the money. Problem was that they already got money from Russia a year earlier, so they wouldn't help anymore. So Cyprus had no choice but to go along with the haircut of deposits. Mind though that these depositors will be getting shares in the bank back for it.

All the fuss about governments stealing money from depositors is pure BS, and just rhetoric from large companies and criminals looking at losing some of their tax avoidance money parked offshore. You don't see any riots in Nicosia. Why you think that is?!

Without the ECB and the IMF much, much more money would have been lost.

Lesson to learn; don't park your money in a tax haven whose economy is only a fraction of its banks' debt. And if you do, make sure it's at least in a country with strict banking rules and preferably can count on some backup from larger economies for whatever reasons (the Euro currency in this case), so you won't lose all your money if the shit hits the fan.

Ps. Wait for Slovenia, then Luxemburg to go. And after that all those tiny off shore havens! Give it 3 more years and then finally we will see an end to this 'banking' crisis that started exactly 5 years ago.

"Mind though that these depositors will be getting shares in the bank back for it"

The shares are worthless now and will continue to be worthless for many years to come and perhaps forever.

"You don't see any riots in Nicosia." Why you think that is?! Because the government police and the military are heavily armed and the people are not.

The Cypriot economy will be in shambles, joblessness will become an epidemic, small businesses will go bankrupt and the ordinary folk (who had nothing to do with creating the problems) and who had 'less than 100K Euros in their accounts won't be hurt - well isn't that just dandy! All because the majestic EU really just could not deliver all the fantasy and daydreams set forth in its formation.

Socialism - sooner or later you run out of other people's money.

[Exsexyman]

I think there is a difference between investing your money in a high risk fund and depositing it in a bank. Just who regulates these banks? Who wasn't keeping an eye on this?

As far as i understand they regulate themselves, certainly in the UK. A bit like the mafia regulating on what constitutes organized crime.

[Pakboong]

Perhaps fractional reserve banking is on the outs after some 500 years.

Fractional lending is here to stay, at least in US. Fed is not going anywhere. Unfortunately, tighter regulation is still needed. Banks should not be allocating large portions of their portfolio to high risk investments, CDOs or junk bonds. That is for hedge fund investors and there is a reason hedge funds are for qualified accredited investors. Issue of very poor regulation and trying to cover high interests paid to encourage large deposits from foreign investors.

What I think you are saying is Banks are not doing a very good job of regulating each other. Virtually all bank regulation comes from the banking community itself.

[nidieunimaitre]

This information has been published for several days now ... only the little guys got hurt... and it was the EU Commissioners who pushed this on Cyprus... If I had money in any EU controlled bank - I would move it ... If Cyprus can be done this way - so can Spain, Greece - then the dominoes will fall all over Europe...

... Russian oligarchs who still had large deposits in Cyprus likely withdrew most of it last week as Cyprus prepared to stop all unauthorized capital movements. On Monday, Reuters reported a major loophole that large Russian account holders may have used to jump ship while ordinary Cypriots lined up at ATMs to withdraw a few hundred euros: Uniastrum Bank, 80 percent of which is owned by Bank of Cyprus, did not place any restrictions on withdrawals in Russia in the week leading up to the restructuring decision.

Laiki Bank and Bank of Cyprus branches in London did not limit withdrawals that week, either. No one knows exactly how much money has been transferred out of Cyprus, Reuters reported. Moreover, several solvent commercial banks, including a Cyprus subsidiary of state-controlled Russian bank VTB, will be left mostly unaffected by the restructuring, the Christian Science Monitor reported.

An editorial in the Thursday edition of Vedomosti concluded that the Russian authorities' accepted the Cyprus restructuring after it became apparent that mainly medium-sized businesses would suffer losses, not the large investors that are the Kremlin's first priority.

Now an exodus of all remaining Russian business likely is beginning, some in Cyprus say.

Read more: http://www.foxnews.com/world/2013/03/28/russia-support-for-cyprus-seizures-deposits-may-mean-big-money-already-out/#ixzz2P8QBViAd

Foxnews??? You base your opinions on Foxnews??? And you think you should share them with us???

FOXNEWS?

[Potosi]

I think there is a difference between investing your money in a high risk fund and depositing it in a bank. Just who regulates these banks? Who wasn't keeping an eye on this?

Nobody. Did you hooray when all this deregulation and privatisation crap started with Reagan and Thatcher, and sanity hasn't been restored ever since?

[Pakboong]

I think there is a difference between investing your money in a high risk fund and depositing it in a bank. Just who regulates these banks? Who wasn't keeping an eye on this?

Nobody. Did you hooray when all this deregulation and privatisation crap started with Reagan and Thatcher, and sanity hasn't been restored ever since?

Actually, privatization began long before those two.. Bank of England has been private since the 17th century. The Fed was preceded by two private central banks in the early parts of US history. There are very few central banks which are not private. I think the list now only includes Iran, Cuba, North Korea, Venezuela and Russia has expressed a desire to return to a national bank. I think there are two more on the list and they slip my mind right now.

[midas]

Cyprus should be a wake-up call -a shot across the bow. I definitely would not keep my money in the bank on these terms!

It should give us clear warning to those of us (which I don't mind admitting includes myself ) who had the wrong idea of what depositing my money in a bank account was meant to represent

It Can Happen Here: The Confiscation Scheme Planned for U.S. and U.K. Depositors

“ few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.” The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills. “

http://www.nationofchange.org/it-can-happen-here-confiscation-scheme-planned-us-and-uk-depositors-1364735979

Edited April 2, 2013 by midas

[chuckd]

Cyprus should be a wake-up call -a shot across the bow. I definitely would not keep my money in the bank on these terms!

It should give us clear warning to those of us (which I don't mind admitting includes myself ) who had the wrong idea of what depositing my money in a bank account was meant to represent

It Can Happen Here: The Confiscation Scheme Planned for U.S. and U.K. Depositors

“ few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.” The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills. “

http://www.nationofchange.org/it-can-happen-here-confiscation-scheme-planned-us-and-uk-depositors-1364735979

A bank's balance sheet is entirely different from others.

Loans are assets...Deposits are liabilities.

[F430murci]

Perhaps fractional reserve banking is on the outs after some 500 years.

Fractional lending is here to stay, at least in US. Fed is not going anywhere. Unfortunately, tighter regulation is still needed. Banks should not be allocating large portions of their portfolio to high risk investments, CDOs or junk bonds. That is for hedge fund investors and there is a reason hedge funds are for qualified accredited investors. Issue of very poor regulation and trying to cover high interests paid to encourage large deposits from foreign investors.

What I think you are saying is Banks are not doing a very good job of regulating each other. Virtually all bank regulation comes from the banking community itself.

US banks have heavy and sometimes overlapping regulation from multiple sources. FDIC and Federal Reserve regulate holdings, reserves or capital requirements, SEC and CFTC limits risks and aggregate indebtedness requirements or thresholds. Many other regulators depending upon department.

US crisis in 2008 was due largely to systemic risks or asset bubbles in housing and commercial real estate market along with lax lending practices.

Cyprus is different, although it would take to much time to great into great detail as to everything going wrong in Cyprus. Gravamen of the issue is that you cannot expect to safely pay huge interests on deposit only type of accounts without covering those payments with risky investments.

Heck yeah, I would love to get something greater than a CD rate on my money with zero risk and federal deposit insurance. Banks should not be placing banking customers' or depostor's money at risk by seeking higher yields on risky investments to pay higher interests to lure huge deposits. Flawed system bound for failure.

[F430murci]

Cyprus should be a wake-up call -a shot across the bow. I definitely would not keep my money in the bank on these terms!

It should give us clear warning to those of us (which I don't mind admitting includes myself ) who had the wrong idea of what depositing my money in a bank account was meant to represent

It Can Happen Here: The Confiscation Scheme Planned for U.S. and U.K. Depositors

few depositors realize it, legally the bank owns the depositors funds as soon as they are put in the bank. Our money becomes the banks, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into bank equity. The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.

http://www.nationofchange.org/it-can-happen-here-confiscation-scheme-planned-us-and-uk-depositors-1364735979

Stories like Cyprus bring out the loonies and doom and gloomers.

Cyprus is failed bank because they screwed up and they have two options: let bank and dissolve (pay deposit insurance and a pro rata percentage of what is left over beyond 100k); or restructure to save bank. The restructuring is a weird scenario, but must be necessary evil for a litany of reasons. They may feel this bailout mechanism is necessary to shelter this small community as much as possible. Cyprus banks apparently took on so much foreign money that their little economy cannot even begin to do a full TARP type bailout.

They also have to deal with Russians, mafia type and etc. who have their own way of doing things . . . People like Michael Sarris are probably not sleeping well at night and constantly watching their back. Play with fire and you eventually get burned.

[midas]

Cyprus should be a wake-up call -a shot across the bow. I definitely would not keep my money in the bank on these terms!

It should give us clear warning to those of us (which I don't mind admitting includes myself ) who had the wrong idea of what depositing my money in a bank account was meant to represent

It Can Happen Here: The Confiscation Scheme Planned for U.S. and U.K. Depositors

few depositors realize it, legally the bank owns the depositors funds as soon as they are put in the bank. Our money becomes the banks, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into bank equity. The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.

http://www.nationofchange.org/it-can-happen-here-confiscation-scheme-planned-us-and-uk-depositors-1364735979

Stories like Cyprus bring out the loonies and doom and gloomers.

Cyprus is failed bank because they screwed up and they have two options: let bank and dissolve (pay deposit insurance and a pro rata percentage of what is left over beyond 100k); or restructure to save bank. The restructuring is a weird scenario, but must be necessary evil for a litany of reasons. They may feel this bailout mechanism is necessary to shelter this small community as much as possible. Cyprus banks apparently took on so much foreign money that their little economy cannot even begin to do a full TARP type bailout.

They also have to deal with Russians, mafia type and etc. who have their own way of doing things . . . People like Michael Sarris are probably not sleeping well at night and constantly watching their back. Play with fire and you eventually get burned.

" Stories like Cyprus bring out the loonies and doom and gloomers."

I will bear that in mind, meanwhile..............the picture which is gradually evolving regarding the world banking system should be of grave concern to everyone

( 1 ) New Zealand Government Now Planning a Cyprus-Style Confiscation to Fund Bank Bail Out

http://intellihub.co...-bank-bail-out/

( 2 )Cyprus-Style Bail-Ins Are Proposed In The New 2013 Canadian Government Budget!

http://theeconomicco...vernment-budget

Edited April 2, 2013 by midas

[midas]

Cyprus should be a wake-up call -a shot across the bow. I definitely would not keep my money in the bank on these terms!

It should give us clear warning to those of us (which I don't mind admitting includes myself ) who had the wrong idea of what depositing my money in a bank account was meant to represent

It Can Happen Here: The Confiscation Scheme Planned for U.S. and U.K. Depositors

few depositors realize it, legally the bank owns the depositors funds as soon as they are put in the bank. Our money becomes the banks, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into bank equity. The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.

http://www.nationofchange.org/it-can-happen-here-confiscation-scheme-planned-us-and-uk-depositors-1364735979

Stories like Cyprus bring out the loonies and doom and gloomers.

Cyprus is failed bank because they screwed up and they have two options: let bank and dissolve (pay deposit insurance and a pro rata percentage of what is left over beyond 100k); or restructure to save bank. The restructuring is a weird scenario, but must be necessary evil for a litany of reasons. They may feel this bailout mechanism is necessary to shelter this small community as much as possible. Cyprus banks apparently took on so much foreign money that their little economy cannot even begin to do a full TARP type bailout.

They also have to deal with Russians, mafia type and etc. who have their own way of doing things . . . People like Michael Sarris are probably not sleeping well at night and constantly watching their back. Play with fire and you eventually get burned.

" Stories like Cyprus bring out the loonies and doom and gloomers."

I will bear that in mind, meanwhile..............the picture which is gradually evolving regarding the world banking system should be of grave concern to everyone

( 1 ) New Zealand Government Now Planning a Cyprus-Style Confiscation to Fund Bank Bail Out

http://intellihub.co...-bank-bail-out/

( 2 )Cyprus-Style Bail-Ins Are Proposed In The New 2013 Canadian Government Budget!

http://theeconomicco...vernment-budget

I don't know if you regard Ron Paul as a “loonie “ or “ doom and gloomer “ ( personally, I think he should have been President )

“The elites in the EU and IMF failed to learn their lesson from the popular backlash to these tax proposals, and have openly talked about using Cyprus as a template for future bank bailouts. This raises the prospect of raids on bank accounts, pension funds, and any investments the government can get its hands on. In other words, no one's money is safe in any financial institution in Europe. Bank runs are now a certainty in future crises, as the people realize that they do not really own the money in their accounts. How long before bureaucrat and banker try that here? “

http://the-free-foundation.org/tst4-1-2013.html

[F430murci]

Cyprus should be a wake-up call -a shot across the bow. I definitely would not keep my money in the bank on these terms!

It should give us clear warning to those of us (which I don't mind admitting includes myself ) who had the wrong idea of what depositing my money in a bank account was meant to represent

It Can Happen Here: The Confiscation Scheme Planned for U.S. and U.K. Depositors

few depositors realize it, legally the bank owns the depositors funds as soon as they are put in the bank. Our money becomes the banks, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into bank equity. The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.

http://www.nationofchange.org/it-can-happen-here-confiscation-scheme-planned-us-and-uk-depositors-1364735979

Stories like Cyprus bring out the loonies and doom and gloomers.

Cyprus is failed bank because they screwed up and they have two options: let bank and dissolve (pay deposit insurance and a pro rata percentage of what is left over beyond 100k); or restructure to save bank. The restructuring is a weird scenario, but must be necessary evil for a litany of reasons. They may feel this bailout mechanism is necessary to shelter this small community as much as possible. Cyprus banks apparently took on so much foreign money that their little economy cannot even begin to do a full TARP type bailout.

They also have to deal with Russians, mafia type and etc. who have their own way of doing things . . . People like Michael Sarris are probably not sleeping well at night and constantly watching their back. Play with fire and you eventually get burned.

" Stories like Cyprus bring out the loonies and doom and gloomers."

I will bear that in mind, meanwhile..............the picture which is gradually evolving regarding the world banking system should be of grave concern to everyone

( 1 ) New Zealand Government Now Planning a Cyprus-Style Confiscation to Fund Bank Bail Out

http://intellihub.co...-bank-bail-out/

( 2 )Cyprus-Style Bail-Ins Are Proposed In The New 2013 Canadian Government Budget!

http://theeconomicco...vernment-budget

No doubt many countries are in and have been in big monetary trouble for some time, especially in the Euro zone. To suggest, however, that the US and UK banking system are conspiring to convert deposits to equity or debt holdings and take our money is ridiculous. I can think of multiple FTC/SEC/FDIC or banking regs this would violate in the US. Don't know about UK, but I would suprised if they did not have similar regulaitons.

Look, if you feel safer not using banks and putting money into tin cans and burying it in your yard, more power to you. Do what you think is best for you. The moral of the story here is you cannot get good returns with zero risk and if you lay with dogs, your gonna get flees. Unfortunately, many innocent people just using the bank for legitimate purposes got burned.

I have lost count of the number of arbitrations and securities lawsuits I have handled since 2008 because people reallocated most if not all of their portfolios to funds heavily weighted in CMOs, CDOs, and junk bonds. Yeah, these funds were providing 18% annual returns and etc., but they were extremely risky investments. People got greedy and took a big hit.

[midas]

Stories like Cyprus bring out the loonies and doom and gloomers.

Cyprus is failed bank because they screwed up and they have two options: let bank and dissolve (pay deposit insurance and a pro rata percentage of what is left over beyond 100k); or restructure to save bank. The restructuring is a weird scenario, but must be necessary evil for a litany of reasons. They may feel this bailout mechanism is necessary to shelter this small community as much as possible. Cyprus banks apparently took on so much foreign money that their little economy cannot even begin to do a full TARP type bailout.

They also have to deal with Russians, mafia type and etc. who have their own way of doing things . . . People like Michael Sarris are probably not sleeping well at night and constantly watching their back. Play with fire and you eventually get burned.

" Stories like Cyprus bring out the loonies and doom and gloomers."

I will bear that in mind, meanwhile..............the picture which is gradually evolving regarding the world banking system should be of grave concern to everyone

( 1 ) New Zealand Government Now Planning a Cyprus-Style Confiscation to Fund Bank Bail Out

http://intellihub.co...-bank-bail-out/

( 2 )Cyprus-Style Bail-Ins Are Proposed In The New 2013 Canadian Government Budget!

http://theeconomicco...vernment-budget

No doubt many countries are in and have been in big monetary trouble for some time, especially in the Euro zone. To suggest, however, that the US and UK banking system are conspiring to convert deposits to equity or debt holdings and take our money is ridiculous. I can think of multiple FTC/SEC/FDIC or banking regs this would violate in the US. Don't know about UK, but I would suprised if they did not have similar regulaitons.

Look, if you feel safer not using banks and putting money into tin cans and burying it in your yard, more power to you. Do what you think is best for you. The moral of the story here is you cannot get good returns with zero risk and if you lay with dogs, your gonna get flees. Unfortunately, many innocent people just using the bank for legitimate purposes got burned.

I have lost count of the number of arbitrations and securities lawsuits I have handled since 2008 because people reallocated most if not all of their portfolios to funds heavily weighted in CMOs, CDOs, and junk bonds. Yeah, these funds were providing 18% annual returns and etc., but they were extremely risky investments. People got greedy and took a big hit.

" To suggest, however, that the US and UK banking system are conspiring to convert deposits to equity or debt holdings and take our money is ridiculous "

Yeah well I am sure many Americans in February or

March 1933 would have also considered the possibility of their personal gold holdings

being confiscated by the US government as being equally ridiculous.........only

to find in April of that year it became a reality…..

[MAJIC]

The solution is certainly worse for the investor than to let the Cypriotic banks collapse, isn't it? What's a bank folding? Nobody gets hurt. They believed they can create more money by sitting in the bank in front of a computer monitor shifting funds around, not by investing in the real economy that manufactures and provides services, but lets not blame them but the government, and the EU. Poor, poor investors, just wanted to elude some taxes, and launder illegal earnings, innocent stuff really, but fell victim to the EU cabal. What a tragedy.

I agree with most of your post,sadly it's the little guys who only wanted a decent interest rate on their investments,who as usual will pick up the check bin!

Most of the big money will already,probably be safely esconsed in Swiss Bank accounts,the Bahamas,Cayman Islands or something similar,suitable for the high rollers,the Big Boys,don't hit the floor,they just move sideways.

Edited April 2, 2013 by MAJIC

[JDGRUEN]

This information has been published for several days now ... only the little guys got hurt... and it was the EU Commissioners who pushed this on Cyprus... If I had money in any EU controlled bank - I would move it ... If Cyprus can be done this way - so can Spain, Greece - then the dominoes will fall all over Europe...

... Russian oligarchs who still had large deposits in Cyprus likely withdrew most of it last week as Cyprus prepared to stop all unauthorized capital movements. On Monday, Reuters reported a major loophole that large Russian account holders may have used to jump ship while ordinary Cypriots lined up at ATMs to withdraw a few hundred euros: Uniastrum Bank, 80 percent of which is owned by Bank of Cyprus, did not place any restrictions on withdrawals in Russia in the week leading up to the restructuring decision.

Laiki Bank and Bank of Cyprus branches in London did not limit withdrawals that week, either. No one knows exactly how much money has been transferred out of Cyprus, Reuters reported. Moreover, several solvent commercial banks, including a Cyprus subsidiary of state-controlled Russian bank VTB, will be left mostly unaffected by the restructuring, the Christian Science Monitor reported.

An editorial in the Thursday edition of Vedomosti concluded that the Russian authorities' accepted the Cyprus restructuring after it became apparent that mainly medium-sized businesses would suffer losses, not the large investors that are the Kremlin's first priority.

Now an exodus of all remaining Russian business likely is beginning, some in Cyprus say.

Read more: http://www.foxnews.com/world/2013/03/28/russia-support-for-cyprus-seizures-deposits-may-mean-big-money-already-out/#ixzz2P8QBViAd

Foxnews??? You base your opinions on Foxnews??? And you think you should share them with us???

FOXNEWS?

Yes, Foxnews covers situations like this with great accuracy - expecially when backed by news gathering agencies ....

http://www.reuters.com/article/2013/03/25/us-eurozone-cyprus-muddle-insight-idUSBRE92O0TM20130325

I suppose you trust that paragon of virtue MSNBC ... the totally unbaised news reporting cable news outfit / sarcasim off

[F430murci]

Stories like Cyprus bring out the loonies and doom and gloomers.

Cyprus is failed bank because they screwed up and they have two options: let bank and dissolve (pay deposit insurance and a pro rata percentage of what is left over beyond 100k); or restructure to save bank. The restructuring is a weird scenario, but must be necessary evil for a litany of reasons. They may feel this bailout mechanism is necessary to shelter this small community as much as possible. Cyprus banks apparently took on so much foreign money that their little economy cannot even begin to do a full TARP type bailout.

They also have to deal with Russians, mafia type and etc. who have their own way of doing things . . . People like Michael Sarris are probably not sleeping well at night and constantly watching their back. Play with fire and you eventually get burned.

" Stories like Cyprus bring out the loonies and doom and gloomers."

I will bear that in mind, meanwhile..............the picture which is gradually evolving regarding the world banking system should be of grave concern to everyone

( 1 ) New Zealand Government Now Planning a Cyprus-Style Confiscation to Fund Bank Bail Out

http://theeconomicco...vernment-budget

No doubt many countries are in and have been in big monetary trouble for some time, especially in the Euro zone. To suggest, however, that the US and UK banking system are conspiring to convert deposits to equity or debt holdings and take our money is ridiculous. I can think of multiple FTC/SEC/FDIC or banking regs this would violate in the US. Don't know about UK, but I would suprised if they did not have similar regulaitons.

Look, if you feel safer not using banks and putting money into tin cans and burying it in your yard, more power to you. Do what you think is best for you. The moral of the story here is you cannot get good returns with zero risk and if you lay with dogs, your gonna get flees. Unfortunately, many innocent people just using the bank for legitimate purposes got burned.

I have lost count of the number of arbitrations and securities lawsuits I have handled since 2008 because people reallocated most if not all of their portfolios to funds heavily weighted in CMOs, CDOs, and junk bonds. Yeah, these funds were providing 18% annual returns and etc., but they were extremely risky investments. People got greedy and took a big hit.

" To suggest, however, that the US and UK banking system are conspiring to convert deposits to equity or debt holdings and take our money is ridiculous "

Yeah well I am sure many Americans in February or

March 1933 would have also considered the possibility of their personal gold holdings

being confiscated by the US government as being equally ridiculous.........only

to find in April of that year it became a reality..

A lot has changed since 1933 and government and Fed did the miraculous and bailed banks out in 2008. I represented 2 large banks and was involved in rerating and TARP process. I saw government trying to help people save not just US, but world banking system. US could have easily done what you are or that article suggests in 2008 and 2009, but it didn't and banks paid every cent back. Some small bank could not absorb losses, but those were handled appropriately.

Perhapsi chose to place my faith in certain things, but we pretty much have to function as a society. If BofA and the big 5 go down, trust me . . . We all have very serious problems then. Just not going to happen.

Europe is lagging behind in recovery and we will ultimately see failures. Cannot be avoided. Perhaps need those failures to occur to get recovery in full swing. Too much bad debt on the books. Cyprus though had many compacting factors.

[MAJIC]

Funny how everyone is blaming the EU and ECB on depositors losing money. The facts are a little different though;

People and companies from outside Cyprus put their money in the hands of a bank in a tiny country because of tax reasons and high interest rates. That bank doesn't know what to do with all this money, so start buying Greek bonds, Greece being their big brother. Greece goes nearly bust, although saved by EU taxpayer money. The Cypriot bank is overexposed to Greek crisis, so will collapse. All depositors will loose all money initially and curators will step in to see what can be salvaged to pay creditors, including the depositors. The Cypriot government guarantees first 100,000 Euro, so will have to fork out that amount, coming out of the 300,000 or so Cypriotic tax payers' wallet. Result; Cyprus bust, depositors lose nearly all, Cypriotic residents screwed.

Now the EU together with the IMF step in to offer help. But no way they can 'paying for Cyprus' past party lifestyle' sell to their own taxpayers. More so knowing that 60% of the money involved is not even from EU people or companies, but dubious Russian money. So EU and IMF say fine; we will bailout your banks for 10 billion (likely more to be needed), but in return you need to come up with 5 billion yourselves. So Cyprus went to Russia to ask for the money. Problem was that they already got money from Russia a year earlier, so they wouldn't help anymore. So Cyprus had no choice but to go along with the haircut of deposits. Mind though that these depositors will be getting shares in the bank back for it.

All the fuss about governments stealing money from depositors is pure BS, and just rhetoric from large companies and criminals looking at losing some of their tax avoidance money parked offshore. You don't see any riots in Nicosia. Why you think that is?!

Without the ECB and the IMF much, much more money would have been lost.

Lesson to learn; don't park your money in a tax haven whose economy is only a fraction of its banks' debt. And if you do, make sure it's at least in a country with strict banking rules and preferably can count on some backup from larger economies for whatever reasons (the Euro currency in this case), so you won't lose all your money if the shit hits the fan.

Ps. Wait for Slovenia, then Luxemburg to go. And after that all those tiny off shore havens! Give it 3 more years and then finally we will see an end to this 'banking' crisis that started exactly 5 years ago.

"Mind though that these depositors will be getting shares in the bank back for it"

The shares are worthless now and will continue to be worthless for many years to come and perhaps forever.

"You don't see any riots in Nicosia." Why you think that is?! Because the government police and the military are heavily armed and the people are not.

The Cypriot economy will be in shambles, joblessness will become an epidemic, small businesses will go bankrupt and the ordinary folk (who had nothing to do with creating the problems) and who had 'less than 100K Euros in their accounts won't be hurt - well isn't that just dandy! All because the majestic EU really just could not deliver all the fantasy and daydreams set forth in its formation.

Socialism - sooner or later you run out of other people's money.

Capitalism - sooner or later you have sucked in,creamed off,and spent other peoples money!

Edited April 2, 2013 by MAJIC