Depositors Burned in Cyprus

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In the run up to the Irish bailout, a large flight of deposits, took place in Ireland. Many feared that there was going to be losses imposed on depositors. Others thought that it was an irrational fear. Maybe it was a rational fear, at the time, as it turns out depositors are not immune to haircuts, as Cyprus has just proven.

It is a deposits for equity swap, shame the equity is worthless ...
Deposits under 100,000 EUR will lose 6.75%.
Deposits over 100,000 EUR will lose 9.9%.
Equity will be given in lieu of the deposit loss.

Moneysavingexpert.com have said, on Twitter, that the FSA guarantee should compensate UK savers in Cypriot banks that were protected by the FSA up to 85,000 GBP. The same does not apply to non UK savers.
 
Whats the odds of that in ireland could it happen
Also is the anpost 10 year bond at 250k only safe to the frist 100k
 
Whats the odds of that in ireland could it happen
Also is the anpost 10 year bond at 250k only safe to the frist 100k




The repayment of all State Savings™ money is a direct, unconditional obligation of the Government of Ireland.

There is no upper limit on the amount protected.
There is no expiry or end date for this protection.
 
Just when people were thinking of bringing back the money they put in overseas deposits ....
 
Now I'm confused just when it seems Ireland is making its way out of these woods this hits, as a depositor should I move or should I stay..?, can I trust the €100k guarantee...??..I have stayed when many on this site recommended a flight but after today I am scared....
 
I wouldn't worry too much. Today's tax announcement on Cyprus bank deposits is mainly to do with taxing dirty Russian money that is holed up in Cyprus banks. A number of european countries have continuously cited Russian money laundering in Cyprus as a reason for not supporting a Cyprus bail out. I suspect that this is their way of resolving that particular issue.
 
Is the swap immediate or do they plan to impose it asap?
Heard on the radio today that there is a run on the banks to get money out !
 
I wouldn't worry too much. Today's tax announcement on Cyprus bank deposits is mainly to do with taxing dirty Russian money that is holed up in Cyprus banks. A number of european countries have continuously cited Russian money laundering in Cyprus as a reason for not supporting a Cyprus bail out. I suspect that this is their way of resolving that particular issue.


Fine if you only hurt the dirty people, but ordinary savers are also getting robbed.

im looking today to find out how to remove my savings from irish banks and put them somewhere safe.

is there any thread on the best ways to do that?
 
I wouldn't worry too much. Today's tax announcement on Cyprus bank deposits is mainly to do with taxing dirty Russian money that is holed up in Cyprus banks. A number of european countries have continuously cited Russian money laundering in Cyprus as a reason for not supporting a Cyprus bail out. I suspect that this is their way of resolving that particular issue.
Or that's the excuse that they are giving.
 
The parliament in Cyprus are voting on this tomorrow.

If approved, then up to 9.9% of peoples savings get taken. If not approved, with confidence gone in Cypriot banks, who knows what will happen if/when the Cypriot banks reopen on Tuesday.

Fine if you only hurt the dirty people, but ordinary savers are also getting robbed.

Agreed. Cypriot pensions who had their life savings in banks are getting hit. There are far more ordinary Cypriot people getting hit than rich Russians with offshore accounts.

im looking today to find out how to remove my savings from irish banks and put them somewhere safe.

is there any thread on the best ways to do that?

Start by reading this thread.
 
People who 2-3 years ago moved Euros out of their Irish accounts and opened accounts in other currencies often lost out.

Many people moved their money into sterling. There are many posts on AAM especially 2010-2011 about how to open U.K. accounts.

Well, depending on the date, people who moved,say, €100k may have got £80k-sometimes less, depending on exchange rates.
Furthermore, few sterling deposit accounts offered within 2% of what the best Irish banks were offering.

So, the person who got £80k sterling in U.K. may have, after 3 years, £85k gross. Today that's worth less than € 100k.

The person who kept €100k in Ireland may have over €110k.

So, anyone who bought €100K three years ago has "lost" ten grand !

A very crude example and I ignore tax. And ,yes, everything can turn around.Sterling and Dollars can shoot upwards and Euro collapses. Who knows ?

The point I'm making is that getting rid of Euros -which was the craze on these pages a couple of years ago - was not such a good idea. Even transferring Euros from an Irish to a German bank lost the investor 2% a year.
 
Now I'm confused just when it seems Ireland is making its way out of these woods this hits, as a depositor should I move or should I stay..?, can I trust the €100k guarantee...??..I have stayed when many on this site recommended a flight but after today I am scared....

I stayed too, and I'm scared too, but to be honest my rationale was that there is nothing you can to guarantee your savings so you may as well take the best rate going, wherever that is. I've tied up a lot of cash in term deposits, so couldn't move it now even if I wanted. The bottom line is even if the government robbed 10% I'd still be showing a profit after 3-5 years, whereas if I'd moved to sterling, dollars, Swiss francs, or "German euros", I'd be showing a loss even if I avoided the 10% hit.
 
Lots of Cyprus news today.

There will be an extra bank holiday in Cyprus on 19 March 2013.
Vote on depositor haircuts delayed until tomorrow.
Government may be 6 votes short of passing depositor haircuts bill.
Lots of dooms day predications as to what happens if the bill does not pass.
 
A couple of points:

1) It seems that there was a 100k guarantee in place and that it is being reneged on. That is somewhat worrying.

2) The reaction of the general public not just in Cyprus but across the eurozone. There could well be a mini bank run because of this. People are already jittery and when they hear of depositers being burned in Cyprus they won't really care about "explanations" about how Cyprus is a "special case" due to dodgy Russians with offshore accounts.

All things considered I think I will hold firm with my State Savings and UB/BOI/PTSB accounts but I also expect to have a few worries this week.

This story will of course result in opportunities for some - eg if someone was thinking of buying shares in a certain Irish bank they might do well to wait a couple of days and see if this Cyprus business results in a nice dip.
 
This could be the next lehman brothers moment. The foolishness of taxing deposits below €100,000 I just cant get over. I feel so sorry for the people of Cyprus.
 
Watching various Cyprus TV stations in the last few hours lots of various comments ,not all in agreement, from Cypriot public, politicians, economists etc...
Some funny,most hysterical, but a few with a grain of truth.

- This measure won't go through. There'll be armed rebellion.
- The Germans didn't occupy us in the War but now we're their slaves.
- The Turks stole from us in the past -now it's our fellow Europeans.
- They're after us because of our friendship with the Russians.

More logical comments:-

- Who'll invest with us again?
- How can we pay our bills/debts when they've taken 10% of the money? It was mainly customers's money
(This last is an interesting comment that came up a few times - many Cypriots are sole traders who ,like many sole traders lodged money into bank before paying suppliers. In effect they used customers money for some cash flow and to make a bit of interest. Very little was actually the sole traders own cash. I suspect that many traders in Cyprus will use this as a delaying tactic for covering debts. More problems.)
- I'll never deposit money in Cyprus in whatever currency or in any bank in Euros again.

----------------------------
Only a few people accepted that either they take the medicine now and suffer for a while - or suffer far far worse for a long time.

And almost nobody in Cyprus feels that they were in any way to blame- despite "having partied" for the last several years. Sounds familiar?

However, the big difference between Cyprus and Ireland is the fact that no Cypriot feels that anywhere in EU is a safe place to keep money. Maybe we're starting to feel the same.
 
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