Cyprus-Forum.com

[observer]

Amounts to the same thing. When you put money in a bank, you are effectively losing control. It's a gamble in which you hope you make a profit from interest rates. The banks can freeze your money from 3 to 12 days so that you cannot withdraw - they do this regularly and blame it on "clearing times".

I don't think that it is the same thing, since most people affected will have deposited their money for a fixed term or fixed interest rate not invested speculatively. In fact speculators will not be affected as they will have their investments in stocks and bonds, not cash. Bank's can change the terms of interest they pay, but then under normal conditions the investor has the choice of moving the money elsewhere.

According to reports, they will get shares as their "profit" - so if it replaces the interest rate fairly, what's the problem? Isn't this a bit like when the UK government privatized Gas etc - they gave shares to the owners (taxpayers) instead of money and they could sell the shares on to release the money.

The purchase of privatisation shares was voluntary. As a member of the public you 'owned' the utilities being sold. Regardless of whether you agreed with the government or not, after the privatisation you now 'owned' the money that was paid for them. This 'share offer' is not voluntary.

[cyprusgrump]

Amounts to the same thing. When you put money in a bank, you are effectively losing control. It's a gamble in which you hope you make a profit from interest rates. The banks can freeze your money from 3 to 12 days so that you cannot withdraw - they do this regularly and blame it on "clearing times".

Sue their ass:

EU Charter of Fundamental Rights, article 17:

1. Everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions. No one may be deprived of his or her possessions, except in the public interest and in the cases and under the conditions provided for by law, subject to fair compensation being paid in good time for their loss. The use of property may be regulated by law insofar as is necessary for the general interest.

They are giving shares for the levy. So, it's legal.

Besides, looking at some of those interest rates, the levy is set to just below what they would have got in annual interest anyway.

I don't see how matters are made any better by the interest rate being set just below what depositers would have got in annual interest. Depositers made an agreement with the banks to have the interest themselves, not have it taken by the government.

According to reports, they will get shares as their "profit" - so if it replaces the interest rate fairly, what's the problem? Isn't this a bit like when the UK government privatized Gas etc - they gave shares to the owners (taxpayers) instead of money and they could sell the shares on to release the money.

The 'shares' are clearly worthless... if they had any value the government (or banks) could have simply cashed them in to resolve the issue...

[GreekIslandGirl]

Amounts to the same thing. When you put money in a bank, you are effectively losing control. It's a gamble in which you hope you make a profit from interest rates. The banks can freeze your money from 3 to 12 days so that you cannot withdraw - they do this regularly and blame it on "clearing times".

Sue their ass:

EU Charter of Fundamental Rights, article 17:

1. Everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions. No one may be deprived of his or her possessions, except in the public interest and in the cases and under the conditions provided for by law, subject to fair compensation being paid in good time for their loss. The use of property may be regulated by law insofar as is necessary for the general interest.

They are giving shares for the levy. So, it's legal.

Besides, looking at some of those interest rates, the levy is set to just below what they would have got in annual interest anyway.

I don't see how matters are made any better by the interest rate being set just below what depositers would have got in annual interest. Depositers made an agreement with the banks to have the interest themselves, not have it taken by the government.

According to reports, they will get shares as their "profit" - so if it replaces the interest rate fairly, what's the problem? Isn't this a bit like when the UK government privatized Gas etc - they gave shares to the owners (taxpayers) instead of money and they could sell the shares on to release the money.

The 'shares' are clearly worthless... if they had any value the government (or banks) could have simply cashed them in to resolve the issue...

You're making assumptions again. Even though most depositors don't need the last 6% or 9% of their huge savings at most times (since a lot of these deposits are locked in for long-term investment, anyway) - you will just need to sell them when the rates suit you.

[cyprusgrump]

You're making assumptions again. Even though most depositors don't need the last 6% or 9% of their huge savings at most times (since a lot of these deposits are locked in for long-term investment, anyway) - you will just need to sell them when the rates suit you.

It clearly isn't an assumption is it...?

The banks are on the point of collapse - therefore the shares are completely worthless. If they had any value the banks would have just sold them on the open market and solved the problem.

I'm sure there are many who have their money in the bank for long-term investment. There are also many who do not and this haircut is deeply unfair...

For example, there was a question earlier about being contractually committed to buying a property - for that person the shares are completely worthless.

I mentioned yesterday about somebody that had transferred some funds into their account to pay for their title deeds - will the land registry accept their new shares next week instead of cash? No.

Worthless.

[DrCyprus]

is 'οργανισμός χρηματοδοτήσεως στέγης' going to be affected as well?

[B0B]

oh come on...this was done over a long weekend..wss decided on a saturday...and it hasnt even been voted in yet..but bank accounts have been frozen already..thats illegal already....

What is illegal about it, you will have access on Tuesday.

i wouldnt count on that
there are rumors the banks are not going to open any time soon
because lets face it - once they open - everyone withdraws and they go bankrupt
because they are not getting any money from ecb because the bailout has to be signed first by every other eu member
for that to happen theres the standard 6 weeks period
during that time i dont think any bank will open
so how would business operate?
who cares
long story short - prepare for martial law

[Sonnyboy]

Difficult to get up to the minute info from here in UK other than about the political aspects - need info about the impact on ordinary people on the street. are the cash machines simply empty, or have they been closed?

Really do feel for everybody on the fabulous island.

[cyprusgrump]

Difficult to get up to the minute info from here in UK other than about the political aspects - need info about the impact on ordinary people on the street. are the cash machines simply empty, or have they been closed?

Really do feel for everybody on the fabulous island.

Cash machines empty...

[Sonnyboy]

Thanks. Well if this plan goes ahead (looks like Monday is the crunch day) and the banks re-open on Tuesday, I would have thought that most investors will move their money elsewhere, so that will surely open another can of worms, with the banks severely depleted? Could it be a "damned if you do, damned if you don't" scenario for the Govt.?
Not looking good.

[Sonnyboy]

because they are not getting any money from ecb because the bailout has to be signed first by every other eu member
for that to happen theres the standard 6 weeks period
during that time i dont think any bank will open

I think you'll find that the arrangements are all already in place and that the only further requirement is the assent and agreement of Cyprus Govt, then it will kick in. Or to put it another way, international agreement to the bailout has already been secured.