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Silver Wheaton Corp. Message Board

  • ilap2004 ilap2004 Mar 26, 2013 1:12 PM Flag

    Cyprus bail-out: savers will be raided to save euro in future crises, says eurozone chief

     

    Despite promises since last week that the country’s banks would reopen Tuesday, the government late Monday ordered all of them, including the Bank of Cyprus and Cyprus Popular Bank to stay shut through at least Thursday. The extended bank closing is to reduce the risk of a bank run by nervous depositors. Automated cash withdrawals will be limited to €100 a day.

    In the €10 billion, or $13 billion, bailout agreement announced Monday, only insured accounts up to €100,000 were protected from taxation to help fund the bailout, with estimates that uninsured depositors with larger accounts could face losses of up to 40 percent.

    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.

    "If there is a risk in a bank, our first question should be 'Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?'," he said.

    "If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders."

    Ditching a three-year-old policy of protecting senior bondholders and large depositors, over €100,000, in banks, Mr Dijsselbloem argued that the lack of market contagion surrounding Cyprus showed that private investors could now be hit to pay for bad banking debts.

    Last night, the Dutch finance minister tried to row back from his comments by insisting that "Cyprus is a specific case".

    This topic is deleted.
 
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