Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, desperate idea of a few Eurozone “troika” officials scrambling to salvage their balance sheets. A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland; and that the result will be to deliver clear title to the banks of depositor funds.
New Zealand has a similar directive, indicating that this isn’t just an emergency measure for troubled Eurozone countries. New Zealand’s Voxy reported on March 19th:
The National Government [is] pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts . . . .
Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.
Can They Do That?
Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.” The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.
Cyprus is another world in terms of finances. So far behind, for instance i read yesterday some older customers didn't even have cash cards to withdraw money. We're protected up to £85,000 in this country.
Quote: Chinese_alan wrote in post #3Cyprus is another world in terms of finances. So far behind, for instance i read yesterday some older customers didn't even have cash cards to withdraw money. We're protected up to £85,000 in this country.
I thought that some banks only guaranteed 50k. So if you have say 750,000 and the bank goes bust then you only get 50k. A friend of a freind who owns some petrol station was told that he would only get 50k. He banks around 250,000 a month!
Quote: Chinese_alan wrote in post #3Cyprus is another world in terms of finances. So far behind, for instance i read yesterday some older customers didn't even have cash cards to withdraw money. We're protected up to £85,000 in this country.
I thought that some banks only guaranteed 50k. So if you have say 750,000 and the bank goes bust then you only get 50k. A friend of a freind who owns some petrol station was told that he would only get 50k. He banks around 250,000 a month!
The FSA cover up to £85,000, banks may cover 50k personally but aslong a bank.....well....is a bank, you'll get £85,000. If you go up to a cashier in a bank there will be a sticker on the glass telling you about the £85,000, well, thats what I've seen quite a fair bit in the recent past.
There you go mate, recent change, so IT WAS £50,000 but they've increased it. I personally dont think there should be a limit, people bank money for security, not for risk.
Quote: Chinese_alan wrote in post #9http://www.fsa.gov.uk/pages/consumerinformation/compensation/latest/limit_increase.shtml
There you go mate, recent change, so IT WAS £50,000 but they've increased it. I personally dont think there should be a limit, people bank money for security, not for risk.
That what the friend of a freind said to the bank, why should he put around 250,000 a month into that bank when he knows his money is not safe?
Quote: Chinese_alan wrote in post #9http://www.fsa.gov.uk/pages/consumerinformation/compensation/latest/limit_increase.shtml
There you go mate, recent change, so IT WAS £50,000 but they've increased it. I personally dont think there should be a limit, people bank money for security, not for risk.
That what the friend of a freind said to the bank, why should he put around 250,000 a month into that bank when he knows his money is not safe?
Well....It depends.....I personally see it as being safe....In my lifetime there has only been one Bank Run that i remember and that was on Northern Rock.......Its a risk people have taken for a long long time, the only other alternative is investing (apart from keeping the cash himself) and they're both more risky than depositing.
Shouldn't worry too much about UK banks. HOWEVER if I lived in a country waiting for or already involved in one of those European Union "rescue" programs, I'd be scared shitless. I hope to see the day this Euro bullshit project ends!
Fri Mar 29, 2013 1:38 pm (Last edited: Fri Mar 29, 2013 1:42 pm)
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