Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Cyprus to shape future euro bank rescues: Eurogroup head
Reuters ^ | 3/26/13 | Luke Baker

Posted on 03/26/2013 1:01:30 PM PDT by EBH

A rescue program agreed for Cyprus will serve as a model for dealing with future euro zone banking crises and other countries will have to restructure their banking sectors, the head of the region's finance ministers said.

The approach would mark a radical departure for euro zone policy after three years of crisis in which taxpayers across the region have effectively been on the hook for resolving problem banks and indebted governments via multiple rescue programs.

"What we've done last night is what I call pushing back the risks," Dutch Finance Minister Jeroen Dijsselbloem, who heads the Eurogroup of euro zone finance ministers, told Reuters and the Financial Times on Monday, hours after the deal was struck.

"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 recapitalize yourself?'. If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalizing the bank, and if necessary the uninsured deposit holders," he said.

(Excerpt) Read more at reuters.com ...


TOPICS: Business/Economy; Foreign Affairs; Front Page News; Germany; Government; Israel; Russia; United Kingdom
KEYWORDS: cyprus; cypruscrisis; eucrisis; europeanunion; germany; greece; israel; russia; turkey; unitedkingdom
There it is! There is the actual announcement of what we suspected all along...

Bank Run in Europe now or lose it all. They just put the handwriting on the wall for all to see!

1 posted on 03/26/2013 1:01:30 PM PDT by EBH
[ Post Reply | Private Reply | View Replies]

To: EBH
Why stop socialist spending when you can just take money from the wealthy without even taxing them?

Obama is salivating.

2 posted on 03/26/2013 1:05:38 PM PDT by RoosterRedux (Get armed, practice in the use of your weapons, get physically fit, stay alert!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: EBH

If people have enough money to deposit part of it in a bank, they don’t really need it. My neighborhood Wells Fargo Bank will heartily endorse that. We can fully fund our entitlements and create new ones by taking 40% of the rich bank depositor’s money.


3 posted on 03/26/2013 1:07:56 PM PDT by JimSEA
[ Post Reply | Private Reply | To 1 | View Replies]

To: RoosterRedux

This is really pretty incredible to watch come to full fruition. I am reading this stuff and wondering when the riots start and why it seems like NO ONE is doing anything! Is the apathy really this thick in the world?


4 posted on 03/26/2013 1:08:14 PM PDT by EBH ( American citizens do not negotiate with political terrorists.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: JimSEA

Proverbs 13:22


5 posted on 03/26/2013 1:09:52 PM PDT by EBH ( American citizens do not negotiate with political terrorists.)
[ Post Reply | Private Reply | To 3 | View Replies]

To: EBH

And these idiots are going to be shocked when more institutions start failing due to the bank run they created...


6 posted on 03/26/2013 1:11:19 PM PDT by Wyatt's Torch (I can explain it to you. I can't understand it for you.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: EBH

These finance ministers are legends in their own minds. No amount of financial gimmickery can compensate for three generations of deficit spending, consuming more than is produced and non sustainable debt. This latest gimmick of confiscating private wealth is not exactly new. Wherever it has been done for economic or political reasons, the results have been catostrophic. Ask the Russians or Chinese. Capital flees, people become less productive and economies eventually contract and collapse. An orderly bankruptcy, political and economic reform is the only effective course for the West or it will collapse.


7 posted on 03/26/2013 1:12:50 PM PDT by allendale
[ Post Reply | Private Reply | To 1 | View Replies]

To: EBH
I think there are no riots because the communists/unions/anarchists are the ones who usually riot...and they are the ones winning so far.

Just wait until the economy collapses...then they will riot.

8 posted on 03/26/2013 1:14:14 PM PDT by RoosterRedux (Get armed, practice in the use of your weapons, get physically fit, stay alert!)
[ Post Reply | Private Reply | To 4 | View Replies]

To: RoosterRedux

That is just it. They will just come and take it.

They are calling this as taking from the “rich” and talk of Russia money laundering, but really how much is 100,000 eu? $128,000 dollars?

That is the small business man,...that is a retirement account for a middleclass person...


9 posted on 03/26/2013 1:14:38 PM PDT by EBH ( American citizens do not negotiate with political terrorists.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: EBH
I am reading this stuff and wondering when the riots start and why it seems like NO ONE is doing anything!

Maybe because this "bailout" actually wiped out bank shareholders for once. That is a GOOD thing. It also went after uninsured accounts over 100k Euro, that is also preferable to forcing taxpayers to bailout the banks. Now investors will just have to be more careful where they put their money. The Russian mob, for example, will have to find greener pastures for their investments and deposits.

10 posted on 03/26/2013 1:15:00 PM PDT by Longbow1969
[ Post Reply | Private Reply | To 4 | View Replies]

To: EBH
Yep. And if they follow this pattern all over Europe, Europe will collapse as money begins to run away.

Not all bank runs are quick (some are artificially slowed)...but confiscating free capital for the state is an assured way to make it (capital) evaporate.

11 posted on 03/26/2013 1:21:41 PM PDT by RoosterRedux (Get armed, practice in the use of your weapons, get physically fit, stay alert!)
[ Post Reply | Private Reply | To 9 | View Replies]

To: Longbow1969

What what is left in the banks after the confiscation will be transferred elsewhere, causing the banks to collapse.


12 posted on 03/26/2013 1:23:08 PM PDT by RoosterRedux (Get armed, practice in the use of your weapons, get physically fit, stay alert!)
[ Post Reply | Private Reply | To 10 | View Replies]

To: EBH

Matthew 25: 14-30

Of course the difference here being the depositors are owners and not servants.


13 posted on 03/26/2013 1:23:24 PM PDT by tumblindice (America's founding fathers: All armed conservatives.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: Longbow1969

100k Euro

That is not much ...screw all this talk about the Russian mob money, it is a distraction to what is really happening to the average person on the street.


14 posted on 03/26/2013 1:26:56 PM PDT by EBH ( American citizens do not negotiate with political terrorists.)
[ Post Reply | Private Reply | To 10 | View Replies]

To: RoosterRedux
And if they follow this pattern all over Europe

They're not going to follow this pattern because the larger bailouts have already been done in the larger countries.

This was a signal from the EU (mostly Germany) that it's had just about enough of bailing everyone out.

15 posted on 03/26/2013 1:28:29 PM PDT by what's up
[ Post Reply | Private Reply | To 11 | View Replies]

To: EBH; All

Only a Free Trader Communist Globalist thinks it’s OK for taxpayers to bail out banks when Free Trade organizations (which is what the EU is) order citizens to do so....because its Free Trade Communist policies failed

Americans actually dealt with such almost two decades ago when we bailed out Mexican financial institutions with $40-45 billion right after NAFTA passed. You can be sure a Cyprus style bailout will be tried here by the Free Trade Communists


16 posted on 03/26/2013 1:29:44 PM PDT by SeminoleCounty (GOP = Greenlighting Obama's Programs)
[ Post Reply | Private Reply | To 1 | View Replies]

To: EBH

The people who will riot and create violence are typically not rich.


17 posted on 03/26/2013 1:30:05 PM PDT by EEGator
[ Post Reply | Private Reply | To 4 | View Replies]

To: EEGator

How much is 100k Eu?


18 posted on 03/26/2013 1:32:28 PM PDT by EBH ( American citizens do not negotiate with political terrorists.)
[ Post Reply | Private Reply | To 17 | View Replies]

To: EBH
what is really happening to the average person on the street.

Maybe in the future the "average person on the street" will start voting for more responsible governments that don't massively overspend and allow their nations banking system to implode?

19 posted on 03/26/2013 1:32:58 PM PDT by Longbow1969
[ Post Reply | Private Reply | To 14 | View Replies]

To: EBH

I think about $130,000
I know that’s not “rich”, but they still have something to lose.


20 posted on 03/26/2013 1:35:25 PM PDT by EEGator
[ Post Reply | Private Reply | To 18 | View Replies]

To: Longbow1969

You or I wouldn’t have been voting for them...but we’d be paying....


21 posted on 03/26/2013 1:36:56 PM PDT by EBH ( American citizens do not negotiate with political terrorists.)
[ Post Reply | Private Reply | To 19 | View Replies]

To: EBH

so much for it being a “one off”

I am sure the Dems are taking copious notes


22 posted on 03/26/2013 1:53:09 PM PDT by GeronL (http://asspos.blogspot.com)
[ Post Reply | Private Reply | To 1 | View Replies]

To: what's up
because the larger bailouts have already been done in the larger countries

That is only the first tranche, there will be more bailouts required in Portugal, Spain, Italy, and even France.

23 posted on 03/26/2013 1:54:04 PM PDT by expat2
[ Post Reply | Private Reply | To 15 | View Replies]

To: EEGator
I know that’s not “rich”, but they still have something to lose.

And so what is this quibbling we here from 0bama about $250,00? So it is OK for the Cypriot businessman to lose? I don't get what appears to me to by your nonchalance about it?

24 posted on 03/26/2013 1:57:19 PM PDT by EBH ( American citizens do not negotiate with political terrorists.)
[ Post Reply | Private Reply | To 20 | View Replies]

To: GeronL

Exactly! Why would anyone in the EU keep money in the banking system now that the handwriting is on the wall?


25 posted on 03/26/2013 1:59:00 PM PDT by EBH ( American citizens do not negotiate with political terrorists.)
[ Post Reply | Private Reply | To 22 | View Replies]

To: GeronL

Agreed.


26 posted on 03/26/2013 2:04:43 PM PDT by EEGator
[ Post Reply | Private Reply | To 22 | View Replies]

To: EBH

Huh?


27 posted on 03/26/2013 2:05:07 PM PDT by EEGator
[ Post Reply | Private Reply | To 24 | View Replies]

To: what's up
Could Spain and Italy be next? Fears that Cyprus-style raid on savings accounts will be used to bail out struggling economies
28 posted on 03/26/2013 3:03:57 PM PDT by RoosterRedux (Get armed, practice in the use of your weapons, get physically fit, stay alert!)
[ Post Reply | Private Reply | To 15 | View Replies]

To: EBH

Socialism on the march


29 posted on 03/26/2013 3:18:58 PM PDT by Tzimisce (The American Revolution began when the British attempted to disarm the Colonists.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: expat2

My guess is that those tranches are less likely to asked for now that the precedent has been set in Cyprus ... bailouts are no longer free.


30 posted on 03/26/2013 3:32:17 PM PDT by what's up
[ Post Reply | Private Reply | To 23 | View Replies]

To: RoosterRedux

Post #30.


31 posted on 03/26/2013 3:33:02 PM PDT by what's up
[ Post Reply | Private Reply | To 28 | View Replies]

To: what's up
Just no way of knowing. The EU is beyond electoral responsibility and beyond the reach of the law.

And now that there is precedent for confiscation of bank capital...the EU is aglow with excitement over this new opportunity.

32 posted on 03/26/2013 4:04:00 PM PDT by RoosterRedux (Get armed, practice in the use of your weapons, get physically fit, stay alert!)
[ Post Reply | Private Reply | To 31 | View Replies]

To: RoosterRedux

Perhaps German taxpayers are aglow with the prospect of getting something back after bailing out so many freeloaders.


33 posted on 03/26/2013 9:23:43 PM PDT by what's up
[ Post Reply | Private Reply | To 32 | View Replies]

To: Longbow1969

Wait - why’s this the “opposite of a bailout,” therefore good?

This is theft of deposits and shareholder worth, pure and simple.


34 posted on 03/28/2013 5:47:14 PM PDT by 4Liberty (Some on our "Roads & Bridges" head to the beach. Others head to their offices, farms, libraries....)
[ Post Reply | Private Reply | To 10 | View Replies]

To: 4Liberty

Theft by whom? The bank(s) have failed. The only people that actually deserve their money are the insured depositors. And that is exactly who is NOT getting wiped out or taking a huge haircut - the insured depositors. There is no good solution here. This one is just better than going directly to the taxpayers to bail out yet more banks. In this case the shareholders in the “bad” banks lose everything - just like shareholders in other bankrupt company lose their shirt. That’s how it should work. Uninsured depositors (deposit amounts over 100k Euro) are going a lot of money, but that’s better than losing ALL their money. Everyone knew these banks were in serious trouble, and they knew it for a long time now. Shareholders and big depositors just bet on the resolution being another typical tax payer financed bailout, the were wrong.


35 posted on 03/28/2013 6:24:10 PM PDT by Longbow1969
[ Post Reply | Private Reply | To 34 | View Replies]

To: EBH
"What we've done last night is what I call pushing back the risks," Dutch Finance Minister Jeroen Dijsselbloem

What you did last night is what I call theft.

36 posted on 03/28/2013 6:25:30 PM PDT by Colonel_Flagg (Blather. Reince. Repeat.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Longbow1969

“Uninsured deposits” are presumably at risk from common theft — not govts. and policies supposedly in place to ENFORCE these very agreements (rule of law).

You seem like a ‘Rat visitor, from your “comments.”

Have a nice day (get lost.)


37 posted on 03/29/2013 3:31:47 PM PDT by 4Liberty (Some on our "Roads & Bridges" head to the beach. Others head to their offices, farms, libraries....)
[ Post Reply | Private Reply | To 35 | View Replies]

To: 4Liberty
Have a nice day (get lost.)

You're the one that posted to me first you dimwit. Now I see you are clearly a real jerk too.

“Uninsured deposits” are presumably at risk from common theft — not govts. and policies supposedly in place to ENFORCE these very agreements (rule of law).

The banks failed you idiot. Do you get that? FAILED. That's why deposit insurance exists, to protect people in the event of bank failure. People were either going to lose some of their money or ALL of their money. The other option was for another taxpayer funded bailout of banks - which was thankfully rejected.

There was no good solution here. The government and the banks were negligent and have been for years. The voters are ultimately responsible for the corruption they allowed to take root through the politicians they've been voting for over and over again.

You seem like a ‘Rat visitor, from your “comments.”

You obviously have zero idea what you are talking about. Maybe you should take the time to learn something, which you clearly need to do, instead of just hurling insults. The reason this bailout is better than what we've seen in the past is because it held bank shareholders responsible, rather than immediately ask taxpayers to bail them out. Uninsured deposits are just that, uninsured. Everyone in the entire world knew Cyprus' banks were in deep trouble. There is no good outcome here, but this is better than what we've seen in Greece and elsewhere. For once "bad" banks will be allowed to fail, shareholders will get wiped out and uninsured depositors (over 100k Euro) will only lose some of their money instead of all of it.

38 posted on 03/29/2013 3:56:05 PM PDT by Longbow1969
[ Post Reply | Private Reply | To 37 | View Replies]

To: Longbow1969

You don’t know what you’re talking about. Thanks for siding with govt seizures of wealth to “solve” public-sector deficits. Why are you defending this overt state interventionism?

“Whether in Cyprus or in other countries, politicians tend to think in short run terms, if only because elections are held in the short run. Therefore, there is always a temptation to do reckless and short-sighted things to get over some current problem, even if that creates far worse problems in the long run.

Seizing money that people put in the bank would be a classic example of such short-sighted policies.

“After going back and forth, the government of Cyprus ultimately decided, under international pressure, to go ahead with its plan to raid people’s bank accounts.

“But could similar policies be imposed in other countries, including the United States? One of the big differences between the United States and Cyprus is that the U.S. government can simply print more money to get out of a financial crisis. But Cyprus cannot print more euros, which are controlled by international institutions.”

- Tom Sowell, “Can It happen Here?”
http://jewishworldreview.com/cols/sowell032613.php3#.UVYkOlfIflY


39 posted on 03/29/2013 4:38:32 PM PDT by 4Liberty (Some on our "Roads & Bridges" head to the beach. Others head to their offices, farms, libraries....)
[ Post Reply | Private Reply | To 38 | View Replies]

To: Longbow1969

FYI, the depositors are “Taxpayers” too. Why are you siding with taxpayers on the supply (filers) side, yet not siding with asset holders who are now “defacto” taxpayers preyed upon BY THE STATE?

Why not have the politicians do the perp walk, plus, cut down on all the state spending to unions, corporate welfare seekers, rent seekers, etc. to solve this problem?

Are we really arguing about this????????


40 posted on 03/29/2013 4:42:33 PM PDT by 4Liberty (Some on our "Roads & Bridges" head to the beach. Others head to their offices, farms, libraries....)
[ Post Reply | Private Reply | To 38 | View Replies]

To: 4Liberty
You don’t know what you’re talking about.

Actually I know exactly what I am talking about. I didn't say this this was a wonderful solution, I said it was better than the alternative. I explained to people like yourself, who obviously have no clue what they are talking about, why this resolution got some things right.

Thanks for siding with govt seizures of wealth to “solve” public-sector deficits. Why are you defending this overt state interventionism?

As opposed to what? You do realize the other solution was seizing money from the taxpayers to bailout the banks, right? You do understand that the banks had failed and without some extraordinary action they would simply fold and everyone would lose everything. So are you for a taxpayer funded bank bailout instead? Do you even understand that doing nothing wasn't an option? Cypriots may not like this solution, but the government would have immediately collapsed if it had done nothing and the banks were allowed to simply implode. You do understand that the vast bulk of depositors (100K Euro and less) will not lose anything with this resolution. And no, Cypriots are not willing to default and leave the EU - and that wouldn't have helped them with the immediate problem of collapsed banks.

No one is saying this is a terrific outcome, only that is has some better features than past bailouts. This solution finally holds bank share and bondholders responsible. If you are invested in the "bad" banks (Marfin-Laiki), you are probably completely wiped out. That is how it should be. If bank share and bondholders (aka "banksters" as they've come to be called) know they could lose everything, they may start demanding the their banks adhere to more rigorous standards. This solution also treats different banks differently, which is something that should have been done all along. Uninsured depositors in the worst, most irresponsible banks will lose the most money.

41 posted on 03/29/2013 5:15:02 PM PDT by Longbow1969
[ Post Reply | Private Reply | To 39 | View Replies]

To: 4Liberty
Why not have the politicians do the perp walk, plus, cut down on all the state spending to unions, corporate welfare seekers, rent seekers, etc. to solve this problem?

How does that solve the immediate bank problem? The banks were imploding, do you not get that? Arresting all the past irresponsible politicians that Cypriots had voted for over the years is a great idea, but it isn't going to solve the immediate issue. Do you even know that this current government was just elected in February and is from the conservative party? What good would arresting him do?

Apparently you have not read my past comments that blast the irresponsibility of the Cypriot voters for electing corrupt governments again and again that overspent, ran up huge debt, built an unaffordable public sector, allowed the banks to become shot through with corruption, etc. I am one of the few people that directly blame the voters instead of conjuring up nefarious conspiracy theories involving neo-cons, the Bilderberg Group, etc, to explain how Europeans arrived at this sad point in their history. Everything that is happening here is ultimately the result of voters that put spendthrift politicians in power who tried to maintain an unaffordable social welfare state (we're not so far behind Cyprus ourselves). Pointing fingers now won't fix the banks though. This wasn't a wonderful solution, but it was better than past bailouts - which has been my point all along.

42 posted on 03/29/2013 5:31:05 PM PDT by Longbow1969
[ Post Reply | Private Reply | To 40 | View Replies]

To: 4Liberty
Why are you siding with taxpayers on the supply (filers) side, yet not siding with asset holders who are now “defacto” taxpayers preyed upon BY THE STATE?

When banks fail, the shareholders, bondholders and uninsured depositors of that bank are SUPPOSED to be the ones to take the biggest hit. What are you not getting about that? If you invest in a company and it goes belly-up, you lose your shirt - not other people who weren't invested in it. We shouldn't be bailing out bank bond/shareholders. And uninsured depositors should count themselves lucky they are only taking a haircut instead of losing everything.

43 posted on 03/29/2013 5:38:55 PM PDT by Longbow1969
[ Post Reply | Private Reply | To 40 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson