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Unintended consequences
Morally right or wrong many of those with money in Cyprus banks are rich Russians some are billionaires, I doubt they will consider having Billions of euros tied up in a bank with only share certificates to show for it will be pleased with this deal, Some of these people are not what you might call "the nicest of people" If I were in the heirarchy of one of those banks I would be watching my back about now, and my family and my dog and anything else that could explode or be poisened or slashed.
As I understand shares, and I don't understand all the possible variations, you can only sell shares to the value of what the bank is worth, that could be 100 Billion for all I know, but it wouldn't be impossible for one Russian to have 100 Billion tucked away in that bank by himself, (Abramovich is worth a net of $10.6 Billion but probably not in a Cypriot bank) how much are these shares going to be worth right now ?
The reason the Russians are in Cyprus is to enjoy a lifestyle they can now afford and where they not Russia has access to the money they acquired at the end of the cold war, for these Russians I think it may all have just backfired.
As I understand shares, and I don't understand all the possible variations, you can only sell shares to the value of what the bank is worth, that could be 100 Billion for all I know, but it wouldn't be impossible for one Russian to have 100 Billion tucked away in that bank by himself, (Abramovich is worth a net of $10.6 Billion but probably not in a Cypriot bank) how much are these shares going to be worth right now ?
The reason the Russians are in Cyprus is to enjoy a lifestyle they can now afford and where they not Russia has access to the money they acquired at the end of the cold war, for these Russians I think it may all have just backfired.
Sex God
Quote by flower411
you may well be right ... but of course there is no guatantee that the bank's share value will increase..... if you look at the Halifax their shares are now worth approx 1/10th of what they were 10 years ago!
I do think that any bank that has the power to force investment in its shares may well be on to a good thing ...
S`pose it depends how much the guys in charge pay themselves in bonuses
if Cyprus goes down this route then it could set a precedent around Europe even the world which could see the end of banks/banking as we know it :sad:
its estimated that over 50% of European banks are currently trading insolvent
the collapse of the banking system as we know it would pave the way for a world super-bank with most losing a good percentage of their savings or bank deposits.
I am copying a pasting a very interesting post from another (generalist) forum which has some very interesting aspects to it (which I have already posted in the downturn thread but reposted here in case you missed it), especially the comment about what a bank actually is.
Enlightening stuff and should be remembered when your salary next gets posted into your account by your employer....
Enlightening stuff and should be remembered when your salary next gets posted into your account by your employer....
Quote by somebody
In a way it has been a welcome awakening, again, for people to realise that savings in a bank is actually a risky investment in the well-being and success of that particular bank. Iceland had almost been forgotten.
“Banks are not vaults. They are thinly capitalised asset managers that make a promise– to return depositors’ money on demand and at par– that cannot always be kept without the assistance of a solvent state.”
Nothing wrong in Cyprus welcoming investors and savings, it was where the cypriot banks then invested this money: Greek government bonds. The interest rates on these were attractively high, so high that a prudent banker should have realised that there is risk associated and not put all eggs in one basket. But a country cannot default, they thought.
Now comes capital controls, to prevent bank runs and further collapse of the economy. But that has other dimensions. Friedrich Hayek wrote in his 1944 classic, The Road to Serfdom:
The extent of the control over all life that economic control confers is nowhere better illustrated than in the field of foreign exchanges. Nothing would at first seem to affect private life less than a state control of the dealings in foreign exchange, and most people will regard its introduction with complete indifference. Yet the experience of most Continental countries has taught thoughtful people to regard this step as the decisive advance on the path to totalitarianism and the suppression of individual liberty. It is, in fact, the complete delivery of the individual to the tyranny of the state, the final suppression of all means of escape—not merely for the rich but for everybody.
Quote by flower411
Didn`t you already post this in another thread G ?
Yes flower, but I reposted here because I doubt that many people follow the downturn thread these days and my post seems to be a better fit in here.
PMSL !! Almost as if you think people are more likely to read a thread posted by me than one started by Guls !!! I very much doubt it
Just because his style is fuckin incoherant doesn`t mean we don`t respect what he says :lol:
They broke the mould after they made you two :grin:
Sex God
Quote by MidsCouple24
I have one question ....... how are the Swiss doing, my total savings are in a Swiss Bank deposited when I lived there :small-print:
there you are mids
you do know if its undeclared to HMRC then you could lose up to 45% of your deposits, declare it and you would only lose 10%
but then i expect you to know this as the HMRC wrote to most people with offshore accounts offering this amnesty
Quote by Lizaleanrob
I have one question ....... how are the Swiss doing, my total savings are in a Swiss Bank deposited when I lived there :small-print:
there you are mids
you do know if its undeclared to HMRC then you could lose up to 45% of your deposits, declare it and you would only lose 10%
but then i expect you to know this as the HMRC wrote to most people with offshore accounts offering this amnesty
HMRC can kiss my suisse cheesy butt and all it's holes, it was salaries paid to me in Switzerland when I worked there for 3 years and income tax was paid to the Swiss Government on the earnings, (the UK government have no claim to it whatsoever
Quote by GnV
Whilst reviewing this thread, I recalled that there was something in the not too distant past in UK where the Government raided account holders accounts to filch funds which were deemed 'dormant'.
Did I dream it, or did it actually happen?
The Dormant Bank and Building Society Accounts Act 2008
Quote by Rogue_Trader
Whilst reviewing this thread, I recalled that there was something in the not too distant past in UK where the Government raided account holders accounts to filch funds which were deemed 'dormant'.
Did I dream it, or did it actually happen?
The Dormant Bank and Building Society Accounts Act 2008
Thanks. I knew there must have been a reason for putting all our money in Euros.
Quote by Rogue_Trader
If I was in Cyprus right now I would be taking as much as I would be able and moving it across the border in to one of the Turkish banks.
Talk is that there were those 'in the know' who moved their cash out before the 'bank holiday' thus avoiding the haircut.
Would take much guessing as to who they might have been... Politicians undoubtedly. High level bank officials without a doubt leaving the 'little people' to take the brunt of it.
Outrageous.
Interesting that a new 'currency' has been gaining popularity in Cyprus right now. Bitcoin. A method of making payments between people without bank involvement or interference.
An unintended consequence indeed.
Perhaps the people are keen to take charge once more. If it gets bigger, watch how governments will react to the lessening of their grip on people's monetary affairs...
An unintended consequence indeed.
Perhaps the people are keen to take charge once more. If it gets bigger, watch how governments will react to the lessening of their grip on people's monetary affairs...
