Posted on 03/26/2013 12:59:01 AM PDT by bruinbirdman
Savings accounts in Spain, Italy and other European countries will be raided if needed to preserve Europe's single currency by propping up failing banks, a senior eurozone official has announced.
The new policy will alarm hundreds of thousands of British expatriates who live and have transferred their savings, proceeds from house sales and other assets to eurozone bank accounts in countries such as France, Spain and Italy.
The euro fell on global markets after Jeroen Dijsselbloem, the Dutch chairman of the eurozone, announced that the heavy losses inflicted on depositors in Cyprus would be the template for future banking crises across Europe.
"If there is a risk in a bank, our first question should be 'Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?'," he said.
"If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders."
Ditching a three-year-old policy of protecting senior bondholders and large depositors, over €100,000, in banks, Mr Dijsselbloem argued that the lack of market contagion surrounding Cyprus showed that private investors could now be hit to pay for bad banking debts.
"If we want to have a healthy, sound financial sector, the only way is to say, 'Look, there where you take on the risks, you must deal with them, and if you can't deal with them, then you shouldn't have taken them on,'" he said.
"The consequences may be that it's the end of story, and that is an approach that I think, now that we are out of the heat of the crisis, we should take."
The announcement is highly significant as it signals the mothballing of the euro's €700bn bailout fund,
(Excerpt) Read more at telegraph.co.uk ...
I think this will be very good for the Swiss Banks.
http://www.economy.com/dismal/article_free.asp?cid=232885&tid=5AB5D93B-6C42-4355-8264-60410C40EF8E
Want to read some real insanity? Click the link above. The northern EU is issuing negative yield bonds. People are paying the government to hold their money. I read where banks here had bought negative yield paper from the US as well. This may indicate that the banks, because of politics and their charters, may have no choice but to “invest” their depositor’s money in these bonds. The EU is on its death bed. Private depositors are crazy to leave their money in banks. Note that it says deposits have been declining in EU banks for some time.
um... no they wont... because now everyone will simply not put their money in the bank!
are these people REALLY that dumb?
Obama already thought of that and forced the Swiss a year or so ago (along with every other similar place in the world) to divulge the information on accounts.
They have been planning this for years. The final blow is about to drop.
If a massive national bank failure occurs, such as in Cyprus or during the Depression, the gov’t may not have the money to cover deposit insurance claims, or may decide the money is best spent elsewhere.
Does ANYONE, under the above circumstances, expect our US government to begin sending out $100,000 checks to millions of people? Even if they did, where would you cash/deposit it?
Suggestion for future bank bailouts: The assets of the officers & directors will immediately be taxed at 100%.
Lending reasonable multiples is not a problem so long as it is a reasonable multiple. It’s when the leverage gets too high that a bank run can kill the bank. Banks globally have gone way too far in leveraging.
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