tag:blogger.com,1999:blog-36227136.post2530477938506860151..comments2024-01-16T08:40:53.682+00:00Comments on <a href="http://www.openeurope.org.uk">Open Europe</a>: Full circle in CyprusOEhttp://www.blogger.com/profile/00556463374230498875noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-36227136.post-13003300342892657182013-03-23T21:04:51.437+00:002013-03-23T21:04:51.437+00:00I am personally affected by the levy. I am a Cayma...I am personally affected by the levy. I am a Cayman Islands resident so not a tax evader (as there is no income tax in my country), nor a money launderer, nor have I made any risky investments as I have not invested with one of the troubled banks, but with the properly cashed-up Piraeus bank.<br><br /><br />Therefore I would have supported the solution to levy the bank accounts of ALL Bank of Cyprus and Popular bank customers with 20+ % as indicated this morning, as ultimately you must either have been stupid to stay with them - or greedy, as due to their situation they had offered good interest for the last few years. <br><br /><br />And it is a common rule of investing - the higher the risk, the higher the possible gain OR loss.<br><br />However, to punish customers of all other banks is just wrong and continues to send the wrong message. <br><br /><br />It is a preview of what will happen to deposits, real estate, and everything else politicians can get their hands on for the next few years in Europe.<br />To punish Cyprus is a joke in itself form the beginning - the only reason why Cyprus is in trouble is because of an earlier EU - decision to haircut 80% of Greek bonds which cost Cyprus about 5 billion Euros and was the cause of all the trouble.<br><br />So the EU decides on the haircut to save Greece and puts Cyprus into trouble - and then decides to be much harder on Cyprus than on Greece. This does not make sense.<br><br />I am in the banking sector. Last week alone, a 10 digit amount was received in Cayman and BVI banks from European and Russian investors - many form Italy, Spain, and other European countries that are afraid that politicians will rob them too.<br><br />The introduction of the Euro was the beginning of the end of democracy in Europe. The people who still try to convince people that they are safe should be prosecuted.<br><br />Also, if anyone expects rich Russians with billions of $ in Cyprus bank accounts to let the responsible people who robbed them of 20% of their money to live a healthy and peaceful life - keep dreaming.<br><br />The vengeance will be visible and not nice.Anonymoushttps://www.blogger.com/profile/06452334553457057567noreply@blogger.comtag:blogger.com,1999:blog-36227136.post-39173285674835396362013-03-23T04:00:08.481+00:002013-03-23T04:00:08.481+00:00If they'd originally gone for 15% (or whatever...If they'd originally gone for 15% (or whatever) on >=100,000 and nothing for <100,000 then they might have got away with it. It's surprising that the decision-making is so fragile that they accidentally proposed taxing the insured depositors (isn't that simply illegal?), which was guaranteed to explode in their face. But now if they revert to taxing >=100,000 it's too late in that no-one will fully trust the <100,000 guarantee any more. Capital flight here we come.<br /><br />Incidentally, establishing the term "tax" for the proposed levy is a pretty cheeky piece of subterfuge in itself. A "6.75% tax" doesn't sound so bad, but of course taxes aren't conventionally retrospective: you know what the tax regime is and you arrange your affairs accordingly. Obviously no-one would have put money in these banks if they'd known that they'd be "taxed" on whatever happened to be in their accounts on some random Friday. (Pity the person who momentarily had a high bank balance because he's in the middle of selling and buying a house.)Alexnoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-58697946088064023532013-03-22T22:06:13.328+00:002013-03-22T22:06:13.328+00:00Quoted from Reuters.
"The meeting was conten...Quoted from Reuters.<br /><br />"The meeting was contentious, participants say. Schaeuble, Dutch Finance Minister Jeroen Dijsselbloem and negotiators for the ECB, EU and International Monetary Fund broke off several times to talk separately with the Cypriots. Other ministers hung around in the corridors, playing games on their mobile phones."<br /><br />Remind me again about all eurozone members being equal, and it not being run by Germany?jon liveseynoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-57806699058679190992013-03-22T13:23:03.717+00:002013-03-22T13:23:03.717+00:00The debacle should have highlighted a couple of mo...The debacle should have highlighted a couple of more things:<br /><br />-Banking union can only work if legislative rights regarding banking assets/liabilities are also conferred to the union. If not, then the guaranteed amount is not really guaranteed (as shown by the Cypriotic government).<br /><br />-Banking union with a common deposit insurance can only work if there are no exceptions to the guaranteed amount - nothing more and nothing less allowed. It is surprising that it is even discussed to protect 100% of all deposits, if that were to happen then the banking system would be destabilised (bonds would never get sold again & markets would never penalise poor bankers).<br /><br />A banking union with a common insurance fund would be a common resource controlled by economists.<br />The tragedy of the commons:<br />http://en.wikipedia.org/wiki/Tragedy_of_the_commons<br />"The metaphor illustrates the argument that free access and unrestricted demand for a finite resource ultimately reduces the resource through over-exploitation, temporarily or permanently. This occurs because the benefits of exploitation accrue to individuals or groups, each of whom is motivated to maximize use of the resource to the point in which they become reliant on it, while the costs of the exploitation are borne by all those to whom the resource is available (which may be a wider class of individuals than those who are exploiting it)."<br /><br />Risky bets would be made and the winnings would be kept while the losses would be put to the common resource (deposit insurance).<br /><br />& there are more things about the banking union which most would find unacceptable. One example, can there be different bankruptcy regimes in a banking union? If not, which should be used across europe?<br /><br />Banking union isn't a precursor to a full fiscal union, it is something that comes AFTER the introduction of a full fiscal union. <br /><br />Banking union is a bad idea and should be abandoned.Jespernoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-836241068459736442013-03-22T13:11:28.893+00:002013-03-22T13:11:28.893+00:00Points everybody seems to forget is that the large...Points everybody seems to forget is that the larger (>100K) accountholders in one bank already face a 40% haircut. This means 40 plus say 10% (or around 50% combined).<br />This is simply a big bank going bust, considerably worse for your reputation (what is left of it) than a 12.5% levy iso a 9.9%.<br /><br />Still difficult to see how the will structure that re their obligations out of their taxtreaties. OECD model (used 90% of the time) doesnot allow that as far as I can see it.Riknoreply@blogger.com