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View Diary: Bank Run in Cyprus, Will it Spread to Southern Europe? (322 comments)

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  •  You think Cypriot depositors thought that (1+ / 0-)
    Recommended by:
    marsanges

    they were helping Greek banks by depositing their money in banks in Cyprus? If that is the case all this is saying is that such efforts were not enough. The banking situation in Southern Europe is so horrendous that we'd be lucky if simply wiping out 10% of deposits would solve the problem. I've read that some banks are ~40% undercapitalized, so I don't think this Cypriot experiment will work everywhere. But if it saves the financial system in Cyprus from going down, that is a very worthwhile benefit for all Cypriots. The thing is, someone has to pay for this calamity, and the sums are just too large to say it should be only the rich people or only corporations or the banks themselves (or even governments). It has got to be shared, and since depositors are a primary beneficiary, it makes sense to me that they should be one of the contributors to the solution.

    •  My phrasing was unclear. (2+ / 0-)
      Recommended by:
      dfarrah, ozsea1

      Depositors wouldn't have thought they were helping Greek banks maintain stability.  The Cypriot banks they deposited their funds in, however, may well have intended to comply with ECB entreaties.

      As for your comfort with the less well off paying for the benefit of not being screwed by the same people who are screwing them, well . . . .

    •  it won't be shared (3+ / 0-)

      Senior bondholder will be 'protected'.

      Re-read the diary.

      The "extreme wing" of the Democratic Party is the wing that is hell-bent on protecting the banks and credit card companies. ~ Kos

      by ozsea1 on Sun Mar 17, 2013 at 01:13:05 PM PDT

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    •  Cypriot pols could have targeted larger accts (2+ / 0-)
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      dharmafarmer, nchristine

      Had Cypriot pols targeted deposits above 100k, at 15%, they could have spared all deposits under 100k.

      But Cypriot pols didn't.  They intentionally went after their own citizens, to ensure that Russian deposits could be hit at just 10%.

      Who's getting hit the worst?

      (i) A Russian depositor who's going to take a 10% hit on his 10M on proceeds from unlawful privatizations

      or

      (ii) A struggling Cypriot family who's taking a 7% hit on his 70k life savings.

      And some of you continue to defend the ill-fated Eurozone.

      This is what happens when 17 countries cede monetary sovereignty without a US of Europe.

      And this will continue to happen until

      (i) the southern countries become protectorates within a US of Europe, based in Berlin,

      or

      (ii) the Eurozone unwinds, and each country introduces its legacy currency.

      Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

      by PatriciaVa on Sun Mar 17, 2013 at 01:30:38 PM PDT

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    •  Depositors already contributed (0+ / 0-)

      You can be assured that one way or another the banks passed along the cost of the premiums for deposit insurance. To the extent that the government paid for the system, their taxes already covered it.

      Bank runs only aggravate problems.

      Freedom isn't free. Patriots pay taxes.

      by Dogs are fuzzy on Sun Mar 17, 2013 at 04:29:31 PM PDT

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