Posted on 03/28/2013 12:34:05 PM PDT by Jean S
Chaos in crisis-hit Cyprus as thousands of savers rush to withdraw cash from banks which have opened for first time in two weeks
Ten of thousands of Cypriots scrambled to get hold of what savings they could today after the island's banks opened for the first time in two weeks amid tight restrictions on withdrawals.
There were chaotic scenes outside some banks, with one branch manager in the capital Nicosia forced to placate angry customers clamouring to get in ahead of opening.
Staff had turned up for work early as cash was delivered by armoured trucks, while armed police and hundreds of staff from private security firm G4S were placed on standby over fears of a run on deposits.
Cyprus's banks have been closed while the government negotiated a 10billion euro (£8.5billion) bailout to recapitalise its ailing lenders.
As part of the deal savers with more than £85,000 will lose up to 40 per cent of their cash, a measure which has prompted fury among the cash-strapped island's wealthiest residents.
(Excerpt) Read more at dailymail.co.uk ...
sarah is misinformed. There is no chaos. Cyprus is calm
Who is sarah?
Apparently the "too-big-to-fail" banks have exceeded that 5-to-1 ratio just a little bit. I understand they are closer to 22-to-1... I wonder why they needed 'emergency' measures a few years ago?
Of course we don't know the leverage ration for sure. Banks (any business, actually) that are considered systemically important are allowed to keep 2 sets of books, one for their reporting to their shareholders (and the public), and another to report to government.
That was by executive order - can't have the people know how many firms are insolvent. They might Panic! We might need arms, and bullets, and armored vehicles to keep the peace if they found out!
When will I wake up from this long bad dream???
ooops....that would be simon, not sarah
No. This is a bookkeeping exercise.
do these socialists ever realize the consequences what they’re doing?
They do realize that if they just let the banks fail [like they should], the bank-to-government gravy train will be in danger.
Keep investing in lead. That may be one of the ahem savings needed.
Anybody with large amounts of money in any southern European bank right now is a fool.
Mattress banking is better.
You mean Shep Smith just lied to us when he said it was only a few dozen people? I’m gobsmacked!
The cops came and basically grilled me about “what do you do” and “where did you get that bill”. Luckily someone else in the store recognized the old style or the idiots probably would have called the Secret Service.
Lesson: when a new bill style is introduced, rotate the old and replace with new.
Yeah, I learned about that at the casino when the slots wouldn’t accept my 20’s.
Oh no! The music stopped and there are no chairs left! That’s just not “fair”!!! :O
Fears of a run on bank deposits. LOL, what would give them such a notion?
Seniors can’t remove their SS income, Social Security has gone electronic.
NO, that sounds like about 50% of the USA people...
A bunch of bankers will need to hire people to start their cars,taste their food,guard their children,etc.....
“But, really, what right does a bank have to say that you can’t have YOUR money?”
Because when you put money in a bank, it’s not YOUR money, it’s the BANK’s money!
What people don’t realize is that when they deposit money in a bank, it’s not for the purpose of the bank to hold on to THEIR money for THEIR convenience, but what they are really doing is LOANING their money to the bank! They are actually a lender and not a depositor. And once they loan the money to the bank, it’s no longer their money, it’s the bank’s money! This is all spelled out in the account agreement one signs with a bank, and by loaning your money to the bank you’re giving the bank permission to use the money you loaned them pretty much as they see fit, and there is no real guarantee that you’ll ever get back any of the money you loaned the bank!
Prior to the illusion of FDIC insured deposits (loans) and it’s equivalent in other countries, banks used to go bankrupt all the time, completely wiping out ALL investors’ deposits. That was a big part of the death spiral of the Great Depression and why it was necessary for FDIC insurance to be invented, or otherwise no sane person would ever loan their money to a bank again.
And like in the EU, the FDIC actually only insures accounts up to a certain limit, and for anything over that there simply are no guarantees you’ll ever get the money you loaned the bank back. Period.
Now when banks DO go bankrupt, there are SUPPOSED to be lawful ways in which the remaining assets are distributed to the banks debt holders in an orderly, lawful fashion, the depositors being simply one class of debt holder. That process has worked pretty well in the U.S. recently, but given the propensity of the Obammunists to ignore the law and just do what they feel like, all bets are off for the future.
And in places like Cyprus, it sounds like they didn’t have ready-made procedures for bank bankruptcies anyway, so they had to make some up quickly. One could label such ex-post facto, ad hoc measures “theft”, but the net result to those foolish enough to make giant loans (deposits) to these crappy banks would probably be pretty much the same if Cyprus had a U.S.-like process in place prior to bank bankruptcy anyway, namely the depositors money has simply completely evaporated because the banks made really, really bad investments with their depositors’ loaned money, and they’d wind up with nothing anyway.
And most likely nothing criminal has been involved here either, except maybe criminal stupidity or maybe criminal greed by both the depositors and the banks themselves. Because the depositors were chasing unrealistic returns promised by the bank, and which they the bank delivered by “investing” their depositors money in Greek bonds. Greek bonds were paying extremely high interest rates, but the high interest rates were being paid because it was likely the bonds would fail, which is exactly what happened.
The takeaway lesson here, though, is simply don’t loan your money to a bank. Just keep enough money in your bank account to pay next month’s bills. Even better switch as much of your transactions as possible to cash. It’s actually easier to do than most people think. For example, I live in a small town and pay all of my insurance and property taxes by simply walking in and plunking down the cash. I could do the same thing for my utilities if I wanted. And I never use plastic except when I buy stuff on the Internet.
In truth, by the time I’m eligible to collect SS, it probably will no longer exist.
I don’t think the Russian mob is going to want much publicity.
They were able to get their money out from Branches of the bank in London and Greece. Dur ring the banking holiday the foreign branches of the bank were kept open without limit on withdraw so that all the special people could get their money.
This in turn depleted what the poor saps in Cyprus will ever get back.
Idiots! They never saw an older bill. Sheese...
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