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“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.”

#61

Post by qdog »

cinquemb wrote: post #28
qdog wrote: post #14

Earlier quoted context omitted.

Yeah...funny thing is blaming the EU. The banks were lending out the money on what turned out to be bad assets, not sure there's any cure for that where deposits don't get wrecked. Iceland before, Cyprus now, not sure what they think will happen to Carribean banks in the long run. Bitcoin might be an ok solution for people who don't care about earning interest, but if you still want the interest you have to deal with…

even funnier thing is thinking that these haircuts are gonna do much… the template according to troika is to do more of the same :D granted the only future i see in bitcoins is in actual business transactions and not earnings interests,which with typical fiat are subject to the whims of ZIRP and central m̶a̶n̶i̶p̶u̶l̶a̶t̶i̶o̶n̶ planning :D (which [number of business transactions with bitcoins for goods or services] h…

You would lend out your bitcoins at interest, just like you do with any other currency. Unless you want to be a direct lender, you'd still use a bank.

Maybe the EU's policies led to the propagation of all the bad assets, but Cypriot banks were offering a higher interest to attract deposits. You can't get that higher interest without investing in somewhat riskier assets. Even assuming the EU policy is terrible (I am no expert on the EU and want no part of that argument, btw), the problem with the Cyprus banks was poor controls and risk management, which was by design to attract deposits.

Pretty simple, unless you had a very good reason (tax avoidance, money laundering, interest rate), parking money in the Cyprus banking system was a very bad idea. So either the person with 700k was avoiding taxes, laundering money, enjoying a higher than normal interest rate, or being foolish with their money. I have no idea which it was, but if I personally had to oversee such a sum, I wouldn't be parking it in such a risky place.

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#62

Post by MaysonL »

cynicalkane wrote: post #25
rayiner wrote: post #15

Yes, 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…

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 euro crisis is in essence a balance of payments crisis: Germany persistently ran balance of payments surplus with its euro partners, and their banks kept lending the surplus to their peripheral neighbors to fund their balance of payments deficits.

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#63

Post by mike_esspe »

Shenglong wrote: post #37

Background 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 think here is a better explanation of what happened:

http://www.cyprus.com/cyprus-bailout-stupidity-short-sighted...

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#64

Post by NiekvdMaas »

jlarocco wrote: post #56
Shenglong wrote: post #37

Background 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 ac…

It's true that the majority of these accounts are from foreign people, but that doesn't mean there is anything illegal with putting your money on a Cyprus bank account. Please note that Cyprus is part of the EU for a long time, and this way of tax avoiding (not evasion) is completely legal.

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#65

Post by gregsq »

radicaldreamer wrote: post #53

I'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.

Very true I think. When the banks started to fold in the UK I split my cash into units of up to £35000 each into different banks. The guarantee was per institution, not individual. It certainly made more sense to me to fit within the guarantee limits, though there was no absolute guarantee that even those limits would hold.

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#66

Post by vixen99 »

frozenport wrote: post #42
cynicalkane wrote: post #25

Earlier 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…

An issue with Greek culture? Yes but what about Spain, Italy and Portugal, Ireland - and now maybe Slovenia? They also have immense problems thanks to their Euro status.

Truth is that these counties should never have been asked to join the Euro in the first place and this problem will never be fixed while they remain. However it's the big cosy idea that counts in the minds of the Eurocrats, never mind the human cost.

http://www.telegraph.co.uk/finance/comment/ambroseevans_prit...

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#67

Post by Joeri »

cynicalkane wrote: post #25
rayiner wrote: post #15

Yes, 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…

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 main problem of the eurozone is that debt is not centrally managed. If debt were centrally managed, it would be centrally regulated, and the current crises would have had a lower likelihood. Although to be fair, the U.S. debt is centrally managed, and that didn't seem to help much 5 years ago.

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#68

Post by rayiner »

Samuel_Michon wrote: post #55
frozenport wrote: post #42

Earlier quoted context omitted.

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…

I don't know why you wouldn't look at the city's metro area. And if you look at GDP, really Cyprus is 1/4 the size of Pittsburgh.

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#69

Post by fennecfoxen »

fakeer wrote: post #50
Shenglong wrote: post #37

Background 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…

So, if some country (and as you say Europe) where still primary mode of parking your earnings is banks what are other options to play safe in case such a seizure happens? Real estate is one I can see. What else? Gold, you will have to keep in a bank in the end. What about shares, aren't they somehow related to sth deposited in a bank? I mean, how do you safeguard your savings then?

You can always hold cash... of course, that's got its own risks (theft), and you're not immune from inflation...

Using something a store of value is essentially anticipating that someone will give you something valuable in the future. This holds whether that store of value is a promise from a bank (in your deposit account), or a government bond, or a commodity.

You can never be completely sure of the future. But some entities are much better about it than others.

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#70

Post by Samuel_Michon »

gurvinder wrote: post #49
Samuel_Michon wrote: post #44

Earlier quoted context omitted.

In several comments he talks about Russians being victimized. He also states he'll be moving his company to a small Caribbean country, while he describes it as a “European medium size IT business”. So his company may be registered in Cyprus (and in the future, somewhere in the Caribbean), it's likely that that's not where the activity happens. (How large do you think the market for IT services is on Cyprus or on Cari…

So you seem to imply that all companies which are based on Silicon Valley have their clients in Valley?? Their are IT companies based in Cyprus which have clients all over Europe, and also Globally.

Many companies in Silicon Valley are registered in Delaware or Nevada, but its offices and employees are somewhere near San Jose. I'm implying this medium sized IT company is registered in Cyprus, but it has its offices or employees elsewhere. How else can OP speak so casually about moving his company to the other side of the globe?
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