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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.”

#71

Post by rayiner »

NiekvdMaas wrote: post #64
jlarocco wrote: post #56

Earlier quoted context omitted.

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.

It's not any less technically legal for the E.C.B. to levy those bank accounts.

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

#72

Post by skrebbel »

Oh boohoo.

The OP appears to forget that without the European Commission, all of his money would be lost.

It's like getting mad at the guy who chainsaws you out of the car that you folded around a tree because he sawed your car into two pieces.

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

#73

Post by vacri »

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…

The way some Americans rate city populations is weird to my (Australian) sensibilities. We assume the metro area in the city population - because the city is referred to as a whole. If I go to visit a friend in the metro areas of Sydney, I'm still 'going to Sydney', not 'the Sydney metro area'.

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

#74

Post by qdog »

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?

There seems to be some confusion as to what a bank is on this board.

Every time you deposit say $1 with a bank, they lend out $.90 of it at interest for mortgages, payrolls, etc. It's these investments the bank makes that can (and do) wreck money. The government of the US and EU recognize this risk for most people is detrimental and offer insurance on the first 100,000 deposited.

The phrase "seized account" does not appear to be correct, more correct would be "The Cypriot banks lost something like 40% of all deposits and all depositors over the 100,000 insured mark have lost their investment."

Any deposit in a bank is still an investment, even if they don't pay interest, because banks don't just put all your coins and bills in a vault, they just mark you down as a number in their books. The risk you take is that government backing the deposit insurance AND the bank don't do something dumb. Banks are usually much more highly regulated than hedge funds, but a quick look at how often banks fail (the US has something like 800+ banks on the unnoficial FDIC watch list) should sober anyone up.

Hold physical money is the only not to be at risk of losing a deposit, and then you have to provide for security, and you sure aren't going to earn interest.

I'm not really enthusasiastic about bitcoins, but one could argue they solve the problem of trying to keep a bunch of wealth out of the risk of banks, without having to have a huge pile of physical currency/valuables.

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

#75

Post by jlarocco »

NiekvdMaas wrote: post #64
jlarocco wrote: post #56

Earlier quoted context omitted.

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.

Oops, I updated my post. Meant to say avoidance instead of evasion.

Being legal doesn't change my sentiment.

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

#76

Post by fennecfoxen »

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…

Cyprus's banks are more than just dumps for dirty Russian money. is a banking hub for a variety of entities who want to do business with Europe. They help western Europe and Russia (and, more recently, emerging markets) invest in each other, get stocks listed on each others' exchanges, comply with the applicable financial regulations, and things like that. They do lots of "financial services" and consulting.

Or they did, anyway.

Wikipedia: "As a result of the reforms in the past decade Cyprus has developed into one of the world's more important international business centers. In the years following perestroika it gained great popularity as a portal for investment from the West into Russia and Central and Eastern Europe."

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

#77

Post by rayiner »

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?

The idea of "safeguarded savings" is a conceptual abstraction. Think of a barter economy. I trade you a loaf of bread I baked for a haircut. Where did we get the idea that I should be able to bank that haircut, and come to you 10, 20 years later and still get that haircut? It's a view that comes from seeing money as something of intrinsic value, rather than what it really is: a proxy that decouples transactions in what would otherwise be a barter economy.

In nature, "savings" are subject to loss and decay. You "save" by building a house to live in or storing away grain--all those things are subject to deterioration, disaster, etc. Financializing it doesn't change that underlying fact.

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

#78

Post by JumpCrisscross »

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…

"[Cyprus] had something like 150 billion in private funds stored in two of its banks: the Bank of Cyprus and Lakie"

As of today, deposits stand at €68 billion [1]. The peak was €73 billion in May 2012 [2].

[1] http://www.ft.com/intl/cms/s/0/f13edbfc-9780-11e2-b7ef-00144...

[2] http://www.centralbank.gov.cy/media/xls/2nd_MFS_January_2013...

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

#80

Post by gurvinder »

Samuel_Michon wrote: post #70
gurvinder wrote: post #49

Earlier quoted context omitted.

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?

No, He might not be Cypriot but he has his company based in Cyprus, that is why he is saying he will have to let go all his Cypriot employees.. When all your assets are taken away you don't have a choice but to run from that place and start somewhere else in hope it won't happen again. Like him many people have lost trust on EURO ZONE, and many businesses are trying to move out of the Euro Zone.
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