How to cause a run on the banks

[darmstadt]

Maybe, just maybe the banks in Cyprus have only themselves to blame. I mean, how did it come to this:

Cyprus banking assets are about eight times the size of the economy, and foreign investors hold just under half of all deposits, which total around €70 billion.

Quite possibly:

alleging that much of the Russian money on the island is laundered, or is parked there so the oligarchs can avoid paying taxes on it. Around one-third of the money in Cypriot banks belongs to foreigners, led by Britons and Russians.

Also don't forget that it still has to be agreed by the Cyprus parliament...

[Mich the Tester]

Maybe, just maybe the banks in Cyprus have only themselves to blame. I mean, how did it come to this:

Does that mean the account holders are to blame?

[darmstadt]

Does that mean the account holders are to blame?

Nope but they're taking the brunt sadly whereas it should be the banks, the banking regulators, the government, etc.

A quick overview here

As people have implied, that Cyprus is some sort of tax haven then surely this should come as no surprise either as the EU already has a form of savings taxation which may, or may not, have been ignored or just doesn't work...

Also don't forget that the UK has a tax on savings and this must have brought into effect at some budget at some time or other, so its nothing new really

[Flashman]

I think this sort of collective punishment was known as Sippenhaft in the good old days.

Strange how those old traditions re-surface from time to time.

[centurian]

Also don't forget that the UK has a tax on savings and this must have brought into effect at some budget at some time or other, so its nothing new really

It's not a tax on savings though, but a tax on the interest earned on savings.

But yes, the same mechanism could probably be used to seize money from UK bank accounts. Let's just hope George Osbourne keeps quiet on it - the moment he gets up and categorically says he won't do it - that's the time to stick it under the matress.

[Doggy Styles]

It's not a tax on savings though, but a tax on the interest earned on savings.

A distinction still lost on some.

[BlasterBates]

Maybe, just maybe the banks in Cyprus have only themselves to blame. I mean, how did it come to this:



Quite possibly:



Also don't forget that it still has to be agreed by the Cyprus parliament...

Absolutely....

It´s exactly the same problem that they had in Iceland, nothing to do with the Euro. Still because it´s in the Euro zone it´s a gr8 opportunity to "get angry" and "grandstand".

A lot of account holders lost their deposits in Iceland, at least here they just lose a bit.

There is no difference to losing money because the interest rate is below inflation than if it is taken off you in a tax it amounts to the same thing, your savings get taken off you to payback the debts.

[eek]

Absolutely....

It´s exactly the same problem that they had in Iceland, nothing to do with the Euro. Still because it´s in the Euro zone it´s a gr8 opportunity to "get angry" and "grandstand".

A lot of account holders lost their deposits in Iceland, at least here they just lose a bit.

There is no difference to losing money because the interest rate is below inflation than if it is taken off you in a "haircut" it amounts to the same thing, your savings get eroded.

You're not paying attention to the latest news are you? Cyprus can't find enough MPs to carry the vote so who knows what happens next.

[BlasterBates]

You're not paying attention to the latest news are you? Cyprus can't find enough MPs to carry the vote so who knows what happens next.

The choice is that depositers pay the tax and lose 10% or they lose most of it as they did in Iceland.

...no brainer really

The debate going on in Cyprus is whether to reduce or eliminate the tax for small depositers and increase the tax for depositors with more than 100,000.

[KentPhilip]

Which part of "financial crisis" did you not understand?

Which part of "irony" do you not understand?