So, the system worked and he gets to keep €100K? Because his bank is insolvent and that is the amount of money that was insured?
I'm not saying this doesn't suck for him and his company, but €100K is better than €0.
“My bank account's got robbed by European Commission. Over 700k is lost.”
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Re: “My bank account's got robbed by European Commission. Over 700k is lost.”
#52Earlier quoted context omitted.
Blaming evil banks and profligate creditors while tightening the money supply wasn't a particularly fruitful thing to do the last time there was a global economic crisis, and a whole lot of modern macro was about not repeating that mistake. Then the world goes around and repeats the same offenses, and the public once again buys the easy, moralistic stories. Bleh. The fact of the matter is that the Eurozone is a bad i…
The events unfolding in the Eurozone is the result of it being only a monetary union instead of a fiscal and monetary union. Milton Friedman predicted this would happen in '04.
It is hard to control an economy when you don't control your own currency.
Re: “My bank account's got robbed by European Commission. Over 700k is lost.”
#53I'm not sure why people think investing above the insured deposit ceiling in a badly rated bank is risk free. If you have that much cash, you certainly can do (or pay someone to do) some due diligence and store your assets in a safer way.
Re: “My bank account's got robbed by European Commission. Over 700k is lost.”
#54Earlier quoted context omitted.
Blaming evil banks and profligate creditors while tightening the money supply wasn't a particularly fruitful thing to do the last time there was a global economic crisis, and a whole lot of modern macro was about not repeating that mistake. Then the world goes around and repeats the same offenses, and the public once again buys the easy, moralistic stories. Bleh. The fact of the matter is that the Eurozone is a bad i…
The Eurozone is structured to suck the money out of peripheral economies in times of crisis It seems like Greece is doing much of the sucking, much to the chagrin of their stern German neighbors. I don't see the Euro as structurally deficient, I really think this problem is a due to Greek culture in the early 2000s being incompatible with the EU. Remember that Cyprus is a very small country, being half the size of Pi…
That sounds a lot like colonization.
Re: “My bank account's got robbed by European Commission. Over 700k is lost.”
#55Earlier quoted context omitted.
Blaming evil banks and profligate creditors while tightening the money supply wasn't a particularly fruitful thing to do the last time there was a global economic crisis, and a whole lot of modern macro was about not repeating that mistake. Then the world goes around and repeats the same offenses, and the public once again buys the easy, moralistic stories. Bleh. The fact of the matter is that the Eurozone is a bad i…
The Eurozone is structured to suck the money out of peripheral economies in times of crisis It seems like Greece is doing much of the sucking, much to the chagrin of their stern German neighbors. I don't see the Euro as structurally deficient, I really think this problem is a due to Greek culture in the early 2000s being incompatible with the EU. Remember that Cyprus is a very small country, being half the size of Pi…
“Remember that Cyprus is a very small country, being half the size of Pittsburgh.”
Cyprus is small, but it's not that small.
Pittsburgh, PA: 305,704 people (Pittsburgh metro area is 2.36 million though)
Cyprus: 786,873 people
Pittsburgh, PA: 55.37 mi^2
Cyprus: 3572 mi^2
Courtesy of Wolfram|Alpha: http://www.wolframalpha.com/input/?i=size+pittsburgh%2C+pa+v... http://www.wolframalpha.com/input/?i=population+pittsburgh%2...
Re: “My bank account's got robbed by European Commission. Over 700k is lost.”
#56Background and summary (forgive me if some details need correcting): Cyprus is a tiny country with a GDP not much higher than Tim Hortons. Yet, it had something like 150 billion in private funds stored in two of its banks: the Bank of Cyprus and Lakie. Why? Because the majority of the funds (I am generalizing) belongs/belonged to Russians who took advantage of the people on the conversion out of communism (dirty mone…
I haven't been following this too closely, but the impression I've got from the news media is that the vast majority of accounts with >100k Euros are there for tax avoidance and other shady purposes like you mention. It sucks that this guy's business lost money, but I have a hard time feeling too bad for him, if he (probably) only had the account there for tax avoidance purposes.
I'm curious what percentage of the accounts with >100k Euros actually belong to Cypriots. Those are the people who are really getting screwed.
Re: “My bank account's got robbed by European Commission. Over 700k is lost.”
#57Yes, blame Angela Merkel and not the bank executives at your bank that loaded up on Greek debt while Greece was careening towards insolvency. I appreciate the PR nightmare here for the E.C. People are going to be madder at the E.C. for wiping out depositors at this unviable bank than they would have if the E.C. just let the whole Cypriot banking sector collapse and let everyone lose their money. See: http://online.ws…
Cyprus did not just load up on Greek debt because they were seeking risky loans. They loaded up back when nobody was particularly aware that there was a fundamental problem in Greece because it is easy for a country that is full of ethnic Greeks who speak Greek and are right next to Greece to be aware of opportunities to invest in Greece. When the Greek problems became obvious, they had no easy way to divest themselv…
These banks were paying unsustainable high rates of interest to depositors, and to earn enough to cover their obligations, the banks invested in higher risk government and corporate bonds paying higher rates of interest. The dangers of a Greek debt collapse have been known since before they joined the Euro, this is why Greece's interest rates were higher than Germany's for many years before the crisis.
Turkish Cypriots must be very happy now that the Greek Cypriots rejected the peace settlement in 2004. Otherwise, they'd likely be bankrupt too.
Re: “My bank account's got robbed by European Commission. Over 700k is lost.”
#58So, the system worked and he gets to keep €100K? Because his bank is insolvent and that is the amount of money that was insured? I'm not saying this doesn't suck for him and his company, but €100K is better than €0.
Keeps €100K but can not withdraws or transfers €300 daily.
Re: “My bank account's got robbed by European Commission. Over 700k is lost.”
#59Background and summary (forgive me if some details need correcting): Cyprus is a tiny country with a GDP not much higher than Tim Hortons. Yet, it had something like 150 billion in private funds stored in two of its banks: the Bank of Cyprus and Lakie. Why? Because the majority of the funds (I am generalizing) belongs/belonged to Russians who took advantage of the people on the conversion out of communism (dirty mone…
A lot of the Russians took their money out via loopholes.
http://www.spiegel.de/international/europe/cypriot-parliamen...
At the end of January, some 40 percent of all savings held in Cypriot accounts were on the books of those two banks. Since then, however, much of it has been transferred elsewhere, despite orders from the central bank that accounts at the two institutions be frozen.
...
Transfers for humanitarian aid were permitted which, while certainly an acceptable exception, opened a loophole for abuse. Many are also furious that the bank allowed "special payments," the definition of which was never adequately established.
...
Much of the money was withdrawn from overseas, where Cyprus had no authority. Branches of Cypriot banks in non-euro-zone countries such as Russia and Britain do not answer to the European Central Bank. Their liquidity is controlled by central banks in those countries.
Re: “My bank account's got robbed by European Commission. Over 700k is lost.”
#60Background and summary (forgive me if some details need correcting): Cyprus is a tiny country with a GDP not much higher than Tim Hortons. Yet, it had something like 150 billion in private funds stored in two of its banks: the Bank of Cyprus and Lakie. Why? Because the majority of the funds (I am generalizing) belongs/belonged to Russians who took advantage of the people on the conversion out of communism (dirty mone…
> Interestingly, this time, mostly the Russian dirty money was affected, and there was not as much public outrage (stealing stolen money).
Huh? Sorry, do you assume that all savings above 100k euros were from the Russian Mafia ? That's a very serious claim to make. And even if it was indeed true there is due process to follow before confiscating the funds. You need tracability, trials and so on. And in case you do not seem to know that, bank savings should be protected by the law against confiscation - that is one of the most basic agreements in the property laws in every country. If that principle is violated, the consequences can be serious (bank run, more banks going bankrupt, lack of funds for private companies investment, etc...).
And there is still public outcry anyway because even people with savings less than 100k euros can only withdraw about 300 euros a day, cannot take their savings out, cannot transfer them anywhere. There is serious economic disruption going on because of this mess. If you think it only impacts the Russian Mafia you should travel to Cyprus and see for yourself.