It Begins: Eurozone starts removing money from people's bank accounts

The ironic thing is this plan is meant to prevent financial contagion. I don't know how imposing a bank levy to recapitalize the banks will stop people from panicking in Cyprus, and hell, across Europe.

 

Not sure how this relates to banks failing but...ok.

 

Can you imagine something like this flying in America?

You would see citizens with guns storming the bank.

Just different cultures I guess...

 

Because Cyprus is a hotspot for Russian money laundering with a bankinig sector that's 8 times larger than GDP and because monetary union withoug political union is a bad idea.

I know this takes a way from the Herp-A-Derp brigade (see anything by the threadstarter, e.g.) spouting random bullsh-t about ZOMGS GOVT TAKEOVERS THEY STEALING YOUR MONEY! and trying to draw idiotic parallels to the US in a show of determined ignorance that an inebriated tortoise trying to hump a green rock would find unbecoming, but that's the business they chosse.

 

The middle class played a part in creating the recession no doubt, but they weren't the sole cause of it.

Yet, time and time again, they're the ones' held responsible for cleaning it up.

 

It doesn't, which is why I'm completely baffled by this move.

 

They joined the Euro, which helped them borrow at lower interest rates than was optimal for the economy (thanks to stronger economies like Germany) which led to a bubble.

 

It's all about the beer.....

 

brb, on the phone with my bank teller errr... "private banker".

btw, there is no "should have exempted small depositers" -- only small fries keep their money in bank accounts -- this is hurting personal savings and businesses that keep money in bank accounts for liquidity purposes, but the latter will survive I suppose

imagine if you just moved money into an account to buy a house -- sorry sir, you need to pony up more money now because we just took 10% of it

what a freakin' disaster

 

and they turned themselves into an offshore money laundering haven.

So...there's that.

 

My understanding is that Cypress' problem doesn't stem from budget issues or things like that, but more because the stupid banks made a huge stupid bet and bought a bunch of Greek debt thinking it wouldn't get restructured. When it did, they lost a fortune, leading to this.

 

It's irrational on a purely academic level because in reality, if the banks were to be recapped then you should have withdrew your money before, and now you should keep it in. It's probably better to lose 10% then have a 50% chance of losing 100%. that's several levels above how most people would think about this, understandably. honestly this move would and should cause anyone to flip s**t, because nobody can be expected to sit through and weigh the probabilities of it all in bounded rationality (the same can be said for a bunch of other free market things).

 

Pretty much, but they shouldn't have taxed deposits under 100k, since those probably aren't owned by Russians, and especially since they have deposit "insurance" up to that amount. That is just asinine.

Now they are delaying the vote. By the time the tax goes into effect, how much money will be left? It might have to be a bank holiday WEEK instead of a couple days.

 

The banks are definitely in trouble, but I would guess that the government committed to more spending than they can now afford, just like all the other countries (except Germany) in the Euro bubble.

 

I could be wrong, but I haven't seen any talk of austerity measures or anything for Cypress. It seems like if there were ongoing issues, those would be part of the requirements for any package, before taking money out of depositer accounts was even discussed.

 

Looks like they were running a surplus in 2008, and their overall debt level is about average within the Eurozone - was good in 2008 but has been rising quickly. They have been running some significant deficits the last few years though, presumably because their economic is bank-centered and 2008 destroyed that.

http://epp.eurostat.ec.europa.eu/st...government_debt,_2008-2011_(1)_(%_of_GDP).png

 

Cypress:



Cyprus: