Free Republic

Good riddance to deposit ‘insurance’ By Detlev Schlichter, on 28 March 13 Once the public furor and shrill media coverage have died down it will become clear that events in Cyprus did not mark the death of democracy or the end of the euro but potentially the beginning of the end of deposit ‘insurance’. If so, then three cheers to that. It may herald a return to honesty, transparency and responsibility in banking.Let us start by looking at some of the facts of deposit banking: When you deposit money in a bank you forfeit ownership of money and gain ownership...

US Federal Reserve is reporting a major deposit withdrawal from the nation’s bank accounts. The financial system has not seen such a massive fund outflow since 9/11 attacks. The first week of January 2013 has seen $114 billion withdrawn from 25 of the US’ biggest banks, pushing deposits down to $5.37 trillion, according to the US Fed. Financial analysts suggest it could be down to the Transaction Account Guarantee insurance program coming to an end on December 31 last year and clients moving their money that is no longer insured by the government. The program was introduced in the wake...

The Obama administration is arguing in federal court that a homeschooling family from Germany should be deported back to their homeland, despite what they say is religious persecution. The German government prevented Uwe and Hannelore Romeike from teaching their five children at home instead of sending them to government-run schools, fining them and threatening to prosecute them if they don't obey. When they took their three oldest children out of school in 2006, police showed up at their house within 24 hours, only leaving after a group of supporters showed up and organized a quick protest. But their legal troubles...

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...

German Migrant Program Offers Cautions For US By ROBERT H. REID Women with headscarfs, a traditional dress for islamic women, walk between other people on a street at the district Neukoelln in Berlin. In gritty backstreets of Berlin and other major German cities, housewives wearing head scarves shop for lamb and grape leaves. Old men pass the time in cafes sipping coffee, chatting in Turkish and reading Turkish newspapers. More than 3 million people of Turkish origin live in Germany — the legacy of West Germany's Cold War-era program to recruit temporary foreign labor during the boom years of the...

Banks in Portugal, Spain and Italy may come under funding pressure after a deal earlier this week in Cyprus rescued the island’s financial system at the expense of bank creditors, the Institute of International Finance said on Wednesday. European governments and the International Monetary Fund agreed on Monday to loan Cyprus 10 billion euros as long as the country liquidated its second-largest bank and forced losses on bank bondholders and deposits of more than 100,000 euros. “This new approach is apt to put funding stresses on banks in weaker economies – especially Portugal, Spain and Italy,” the Washington-based association of...

Robert Siegel talks to Joseph Cotterill, writer for the Financial Times, about what may happen if the European Union's bailout plan for Cyprus succeeds and which country may be poised to take on the role as the next Cayman Islands of Eastern Europe.

Cyprus reopens its banks on Thursday while limiting withdrawals, banning cheques and curbing the use of Cypriot credit cards abroad, among measures imposed to avert a bank run after it agreed a tough rescue deal with international lenders. The Central Bank said banks would open their doors at midday (5 a.m. EST) on Thursday after nearly two weeks when Cypriots could only get cash through limited ATM withdrawals. A central bank official said Cypriots would be allowed to withdraw no more than 300 euros ($380) a day. Yiangos Demetriou, head of internal audit at the Central Bank, said on state...

Throughout Cyprus’ financial crisis, German power has been on display. But Germany is pursuing the wrong ojectives, showing how it’s incapable of wielding its power correctly. Cypriot leaders came up with the idea to make their own small-scale savers liable for the bankruptcy of the banks—with the approval of Germany—because they wanted to hold true to their principles of crime and punishment. All of Europe, indeed the entire world, took notice. Despite deposit insurance and Chancellor Angela Merkel’s own promises, in the end it’s the common people who suffer? The plan was withdrawn, and now the burden is falling mostly...

Dmitry Medvedev gave a taste of Moscow’s displeasure over the Cyprus rescue plan on Monday when he said “the stealing of what has already been stolen continues”. Meeting deputies at his residence outside the city, Russia’s Prime Minister said there was a need to “understand what this story turns into in the long run, what the consequences for the international financial and monetary system will be - and thus, for our own interests as well.” Mr Medvedev prefaced his comments by addressing Deputy Prime Minister, Igor Shuvalov, with the words: “Let us, Igor Ivanovich, talk about what’s happening with Cyprus....

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...

NICOSIA (Reuters) - Banks in Cyprus will remain closed until Thursday, and even then subject to capital controls to prevent a run on deposits, after a European Union bailout that the country's president assured his people was in their best interests. After returning from fraught negotiations in Brussels, President Nicos Anastasiades said late on Monday the 10-billion euro ($13 billion) rescue plan agreed there in the early hours of the morning was "painful" but essential to avoid economic meltdown. He agreed to close down the second-largest bank, Cyprus Popular, and inflict heavy losses on big depositors, many of them Russian,...

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...

Oh, my gosh; what a great idea: Does Obama even KNOW that he can tax Russian millionaires and billionaires? Just wait until he finds this new method of taxing and spending. Think of all the bad ideas we can fund with these new “revenues.”  The European Union and Cyprus teamed up over the weekend to come up with a revolutionary way to destroy confidence in the banking system. Confiscate the biggest depositors’ money in the country’s largest bank, kill the second largest bank- and just make sure that you only give Cyprus enough money to ensure a second- and third-...

The decision of the government in Cyprus to simply take money out of people’s bank accounts there sent shock waves around the world. People far removed from that small island nation had to wonder: “Can this happen here?” The economic repercussions of having people feel that their money is not safe in banks can be catastrophic. Banks are not just warehouses where money can be stored. They are crucial institutions for gathering individually modest amounts of money from millions of people and transferring that money to strangers whom those people would not directly entrust it to. Multibillion-dollar corporations, whose economies...

Cypriots vented anger in the streets on Tuesday and were desperate to learn what would happen to their savings, with the government yet to reveal details of controls it will impose to prevent a run when banks reopen after a painful bailout. A special administrator was appointed to run the country's biggest bank, which will take over accounts from the second biggest bank as part of the restructuring package designed to bail out and rein in the oversized financial sector. Cyprus's banks were ordered to remain closed until Thursday, and even then will operate under as-yet-undisclosed capital controls imposed to...

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...

NEW YORK (Reuters) - A top U.S. regulator said on Tuesday that it was too soon to draw conclusions on financial stability from the bailout of Cyprus, which rattled markets globally over the last week.

Yesterday, we first reported on something very disturbing (at least to Cyprus' citizens): despite the closed banks (which will mostly reopen tomorrow, while the two biggest soon to be liquidated banks Laiki and BoC will be shuttered until Thursday) and the capital controls, the local financial system has been leaking cash. Lots and lots of cash. Alas, we did not have much granularity or details on who or where these illegal transfers were conducted with. Today, courtesy of a follow up by Reuters, we do. The result, at least for Europe, is quite scary because let's recall that the primary...

Cyprus, an island most people have forgotten exists, became the center of the world when they put forward a bizarre plan to solve their economic crisis. The leaders of Cyprus proposed a wealth tax that would take funds directly from people’s bank accounts. The plan was abandoned, but the idea behind it still lives on. A recent run-in that we had with the Washington Post shows just how far they are willing to go to foist a bad idea upon us. The Left has been churning some ideas to change our society, most of which will expand the reach of...