Cyprus raids banks accounts

[joeExpat]

Scary development in Europe over the weekend, Cyprus has locked down the banks & levied up to 10% tax on all bank deposits. This is the first time such a levy has been imposed in Europe.

http://www.guardian.co.uk/world/2013/mar/16/cyprus-savings-levy-imposed-eurozone

Imagine if you just sold your house last week, you'd lose 10% of the proceeds.

 

[mattnz]

Finance is a large part of the economy there. They basically just stuffed their entire economy for the sake of a 1 off cash grab. They will see a massive bank run guaranteed.

Even worse, we will see massive bank runs in every country that is in trouble.

The flow on effects from this could be far greater than they imagine. Interest rates in Australia are likely to stay lower for longer.

 

[Doovalacky]

Talk about demolishing any confidence people have in the banks. The flow on effect could be quite massive. No one is going to leave their life saving in the bank if they think there is a risk of a sudden levy "stealing" a portion.

As usual its the middle class who have saved and not lived day to day will be hit the hardest.

I suspect a safe installer is going to be a good job in the Euro countries that are in trouble over the coming months

 

[zed_kid]

Heard through the grapevine that the Russians are gearing up to funnel money from Cyprus to Dubai. Good times ahead for Dubai property IMO

 

[RPI]

Disgusting

Cyprus was a friendly jurisdiction and as part of the EU should be above this thing. Although the EU is the problem I think.

My cousin in England runs quite a large accountancy practice and has just established an office in Cyprus. Not good

 

[Aaron_C]

My God that is just crazy...

 

[Crabnet]

Disgusting

Cyprus was a friendly jurisdiction and as part of the EU should be above this thing. Although the EU is the problem I think.

My cousin in England runs quite a large accountancy practice and has just established an office in Cyprus. Not good

Perhaps Brussels had qualms about bailing out the money laundering centre of Europe without also meting out some punishment.

 

[mattnz]

Bankruptcy would have been a much better option. Iceland is a good example of this.

Imagine if organised crime had cracked bank codes and withdrew 10% of every account. They would be hunted down and shot. Surely this will be held up in the courts for years.

 

[Crabnet]

Bankruptcy would have been a much better option. Iceland is a good example of this.

Imagine if organised crime had cracked bank codes and withdrew 10% of every account. They would be hunted down and shot. Surely this will be held up in the courts for years.

At least the depositors get bank equity in return.
Anyway the deal has to be ratified by their Parliament, so it may not go through.

 

[Angel]

Did you see on the news the guy who parked his bulldozer out the front of his bank in order to make good a withdrawal first thing Monday morning.

 

[mattnz]

An interesting article on the topic here http://www.businessspectator.com.au...l&utm_content=238868&utm_campaign=kgb&modapt=

 

[willair]

Scary development in Europe over the weekend, Cyprus has locked down the banks & levied up to 10% tax on all bank deposits. This is the first time such a levy has been imposed in Europe.

http://www.guardian.co.uk/world/2013/mar/16/cyprus-savings-levy-imposed-eurozone

Imagine if you just sold your house last week, you'd lose 10% of the proceeds.

At least they are only taking 10%,,good time to go os if you have a bodyguard..

 

[HotRod]

An interesting article on the topic here http://www.businessspectator.com.au...l&utm_content=238868&utm_campaign=kgb&modapt=

Ah yes, Steven Keen.

Bet he's salivating.

 

[mattnz]

If the politicians were smart, both sides of the parliament should get together and make a joint statement that this would never be allowed to happen in Australia.

This would ensure the ongoing capital flows that are required to keep the property market inflated.

Such assurances are vital at times like this, especially when European money is looking for a home.

 

[Crabnet]

If the politicians were smart, both sides of the parliament should get together and make a joint statement that this would never be allowed to happen in Australia.

This would ensure the ongoing capital flows that are required to keep the property market inflated.

Such assurances are vital at times like this, especially when European money is looking for a home.

There's been plenty of money flowing into Australia. That's one reason why the exchange rate is stuck where it is. Trouble is the majority of it is speculative, only, not invested in anything of substance. Some say this speculative money should be taxed.

 

[Aaron Sice]

Some say this speculative money should be taxed.

sure thing!

then we can offer tax deductions when they fail, too?

double edged sword, my friend.

 

[Ideo]

Pretty clear reasoning behind this.

It is the major stashing place for Russian money. Scare them, and suddenly the Russian government start talking about a bail out in order to protect their corrupt friends.

EU shock tactics more than anything else IMO

 

[Aaron Sice]

funny the russians are deploying a navy fleet to the Mediterranean.....

 

[Intrinsic_Value]

This is very worrysome.
Markets are not reacting much at this point, so i guess the underlying trading feeling is over-riding it.

But to me this is a very very big concern, given its dictated by the euro ministers and not some isolated country event (with its own currency).

Bank deposits (especially under the agreed limit) are sacrosant.
But the rules are being changed as the game progresses.

Gold reacting a bit, but silver is not. This is telling me that at least in the short term, the market is looking for excuses to 'buy the dip' in equities.

Wheather this will last i dont know.

But my warning attena's are beeping like mad.

This is only cyprus, but given that this has been done once bythe euro, we no know that if things get really bad in the future, they could do this to the other periphial euro countries, and if this happens, it will be really really bad.

They are breaking a basic rule book, a rule that has not been broken since the great depression.

 

[Aaron_C]

Pretty clear reasoning behind this.

It is the major stashing place for Russian money. Scare them, and suddenly the Russian government start talking about a bail out in order to protect their corrupt friends.

EU shock tactics more than anything else IMO

Trying to crack down on money laundering by taxing the general population is not justifiable at all. No way in hell. It is stealing and should be declared unconstitutional.