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Cyprus Bailout: Depositors taxed 9.9%


seabhcan

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Cyprus Secures Bailout Deal - WSJ.com

In Cyprus they burn the depositors. A once off tax on deposits of 9.9% will be applied to help pay back bond holders

An initial assessment of Cyprus's finances in January concluded it needed more than €17 billion, including €10 billion just to stabilize its banks. That would have been an unmanageable burden for the island, whose annual economic output is less than €18 billion and shrinking.
The bailout will be close to 100% of GDP, like ours.

If we'd put a 10% tax on deposits on the night of the guarantee, it would have raised 40 billion. Good idea?
 

Sync

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Jesus. This will kill deposit's in the country. Utterly insane. You are taking around 7% of the wealth out of the country. And this isn't against millionaires exclusively, if you as a cypriot have scrimped and saved €20000 over the years, saved it in a cypriot bank, you are going to have €1350 taken away from you. Gone.

I need this explained to me. Russians have 20 billion in deposits. They will lose at least 1.34 billion (probably 2 billion). Why THE F&CK will those people leave their money in there after it gets taken next week?

The govt have guaranteed bank runs next week. And this isn't some rubbish rumour that scares people, you have concrete evidence that your money is not safe in the state's banks. You're now a fool if you're leaving your money there.

The legality will also be checked. They haven't introduced the law yet, but I'm now prevented from taking my money out?

Cyprus have announced they're closed for business.
 

Franzoni

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Mad stuff......have to agree with the Sync's post above....Cyprus have pulled down the shutters....
 

seabhcan

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Jesus. This will kill deposit's in the country. Utterly insane. You are taking around 7% of the wealth out of the country. And this isn't against millionaires exclusively, if you as a cypriot have scrimped and saved €20000 over the years, saved it in a cypriot bank, you are going to have €1350 taken away from you. Gone.

I need this explained to me. Russians have 20 billion in deposits. They will lose at least 1.34 billion (probably 2 billion). Why THE F&CK will those people leave their money in there after it gets taken next week?

The govt have guaranteed bank runs next week. And this isn't some rubbish rumour that scares people, you have concrete evidence that your money is not safe in the state's banks. You're now a fool if you're leaving your money there.

The legality will also be checked. They haven't introduced the law yet, but I'm now prevented from taking my money out?

Cyprus have announced they're closed for business.
I guess you'd have to check the fine print. The tax might only apply to longer term deposits, rather than current accounts - meaning it you are prevented from immediate withdrawal anyway.
 

BrightDay

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Oct 29, 2011
Messages
737
Jesus. This will kill deposit's in the country. Utterly insane.

I need this explained to me. Russians have 20 billion in deposits. They will lose at least 1.34 billion (probably 2 billion). Why THE F&CK will those people leave their money in there after it gets taken next week.

The govt have guaranteed bank runs next week. And this isn't some rubbish rumour that scares people, you have concrete evidence that your money is not safe in the state's banks. You're now a fool if you're leaving your money there.

The legality will also be checked. They haven't introduced the law yet, but I'm now prevented from taking my money out?
It doesn't appear to be yours - well not until Tuessday at the earliest.
I suppose there is a risk for all depositors in the EU that this "solution" could be applied in future bailouts. This could lead to withdrawing of deposits from other EU banks in the short term.
 

Franzoni

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It doesn't appear to be yours - well not until Tuessday at the earliest.
I suppose there is a risk for all depositors in the EU that this "solution" could be applied in future bailouts. This could lead to withdrawing of deposits from other EU banks in the short term.
Exactly a run on the banks...the very reason for a lot of this austerity and the thing were supposed to avoid at all costs.........

Another ill thought out financial experiment by the Germans and the ECB on a small country who can't fight back....
 

Vega1447

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I expect that the Russian and other high rollers have long since pulled their money out.
This move has been predicted for some time.

Or have account withdrawals been blocked preemptively weeks in advance?
 
D

Dylan2010

it seems unfair if there are no minimum levels. If it was deposits over a 100K then why not? as I assume they had some general deposit "insurance" up to a certain point.
In the future it should not be possible for depositors to chase yield and have any losses socialised, simple moral hazard
 

Vega1447

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Exactly a run on the banks...the very reason for a lot of this austerity and the thing were supposed to avoid at all costs.........

Another ill thought out financial experiment by the Germans and the ECB on a small country who can't fight back....
In your wisdom, what *should* those mean ole Germans have done?
 

parentheses

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Aug 26, 2011
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13,802
Cyprus Secures Bailout Deal - WSJ.com

In Cyprus they burn the depositors. A once off tax on deposits of 9.9% will be applied to help pay back bond holders



The bailout will be close to 100% of GDP, like ours.

If we'd put a 10% tax on deposits on the night of the guarantee, it would have raised 40 billion. Good idea?
Its probably still a good deal for depositors who might get very little if the banks went wallop.

But surely in the interests of justice the bondholders should be forced to share the burden?
 

Franzoni

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In your wisdom, what *should* those mean ole Germans have done?

Jaysus a FFer supporting whats little better than a smash and grab routine to pay off bondholders and the super wealthy.....thats a surprise.....:roll:......well not really because the IMF/troika aren't really on the way are they...?...."oh yes they are"..."oh no their not"........repeat ad nauseum.......and don't forget it was all Lehmans fault....:lol:
 

ShoutingIsLeadership

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Jan 17, 2011
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50,459
Debate has been raging about the manner depositors were treated in Irish banks, over on the mortgage write-down thread, for a few days now.
 

Vega1447

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Jaysus a FFer supporting whats little better than a smash and grab routine to pay off bondholders and the super wealthy.....thats a surprise.....:roll:......well not really because the IMF/troika aren't really on the way are they...?...."oh yes they are"..."oh no their not"........repeat ad nauseum.......and don't forget it was all Lehmans fault....:lol:
@Franzoni. Look again.
My avatar is an *inverted*FF logo - a universal sign of contempt.

Now that's out of the way; what *should* the Germans have done for/to the Cypriots?
 

gijoe

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This is exactly what will now produce a run on the banks in Spain and Italy.
 
D

Dylan2010

@Franzoni. Look again.
My avatar is an *inverted*FF logo - a universal sign of contempt.

Now that's out of the way; what *should* the Germans have done for/to the Cypriots?
I never noticed, goes to show their symbol is so bland its capable of pointing in any direction, a bit like their ethics I guess.
 

VHF

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Bank run - an unintended consequence?
 

Lempo

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Jun 30, 2012
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The risk of this happening has been known for a time already, and still capital flows out of the country haven't been substantial. It's safe to say the 'benefits' in Cyprus has been sooo good it has paid off to keep money there even with the risks calculated in.

Even if the Eurocrats and ministers can't say it aloud there's no reason for the rest of us to pretend the island is not a huge money laundromat and bailing them out is spitting in the face of a honest European tax peasant.

Still perhaps too much to hope for that bringing this to the Parliament would finally be the self-inflected bullet into head the Coalition party and SDP has been teasing for too long already.
 
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Lempo

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Jun 30, 2012
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I don't see bank runs elsewhere, Cyprus is a special special case as the ministers say doing their very best swallowing their actual thoughts. Just look at the Dutch guy in the link. The tax haven issue is a HUGE deal in the Northern Europe, please believe when I say it.
 
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