Something to think about before the financial crash comes to our shores. Peter Spiegel reported on the Financial Times (UK) website this morning:
International lenders agreed to a €10bn bailout of Cyprus early on Saturday morning after 10 hours of fraught negotiations, which included convincing Nicosia to seize €5.8bn from Cypriot bank deposits to help pay for the rescue, a first for any eurozone bailout.
The cash from Cypriot account holders will come in the form of a one-time 9.9 per cent levy on all deposits over €100,000 that will be slashed from their savings before banks reopen Tuesday, a day after a Cypriot holiday. An additional 6.75 per cent levy will be imposed on deposits below that level.
(Editor’s note: Italics added for emphasis)
Notice it’s not just “the rich” who are getting hammered by this “bail-in.”
Rebecca Christie and Corina Ruhe added on the Bloomberg website today:
While the tax on deposits will hurt wealthy Russians with money in Cypriot banks, it will also sting ordinary citizens. Some ATMs in the country have run out of cash, Erotokritos Chlorakiotis, general manager of the Cooperative Central Bank, told state-run CYBC.
I can’t imagine a similar event taking place here going over too well on Main Street.
That’s not to say it can’t happen, though.
Exploring legal avenues for escaping a situation like Cypriot bank account holders now find themselves in might not be a bad idea. If not feasible, keeping one’s money out of the bank may be the smartest play in times of serious economic upheaval.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)
Spiegel, Peter. “Cypriot bank deposits tapped as part of €10bn eurozone bailout.” Financial Times. 16 Mar. 2013. (http://www.ft.com/cms/s/0/33fb34b4-8df8-11e2-9d6b-00144feabdc0.html#axzz2NiWqLmL5). 16 Mar. 2013.
Christie, Rebecca and Ruhe, Corina. “Cyprus Bank Deposits to Be Taxed in $13 Billion Bailout.” Bloomberg.com. 16 Mar. 2013. (http://www.bloomberg.com/news/2013-03-16/euro-area-takes-aim-at-depositors-in-cyprus-bailout.html). 16 Mar. 2013.
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