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Cyprus Banking "Tax"
Posted - 3/18/2013 9:30:11 AM | show profile | flag this post
Anyone following this story?
If you have a bank account in Cyprus, the gov't is going in and taking your money. Citizens trying to withdraw their own money as a matter of protection (from the gov't taking it) are finding that ATMs are no longer allowing withdrawals.
Posted - 3/18/2013 10:30:47 AM | show profile | flag this post
I am shocked...
People in Cyprus still have money?
Posted - 3/18/2013 11:40:01 AM | show profile | flag this post
Here is a one-hour-old story from the NYT about a one-time tax on private accounts, NOT a clean-out:
LONDON – Just as pressure was easing on Europe’s financial sector, the situation in Cyprus has once again created chaos.
After a proposed levy on retail deposits in Cyprus, shares in many of Europe’s largest financial institutions tumbled on Monday. Shares of Barclays fell 4.9 percent, while shares in Deutsche Bank were down 3.3 percent.
Investors are worried that other banks, especially those in highly indebted countries like Italy and Spain, could face further troubles.
In a rare move, Cyprus is trying to raise around 5.8 billion euros ($7.5 billion) from a one-time bank charge on local deposits. Unlike in other European countries, local banks only have a small amount of outstanding bonds, which have their own set of legal complications. So the Cypriot government was unable to require the banks’ creditors to take major losses to finance the bailout.
Posted - 3/18/2013 11:42:29 AM | show profile | flag this post
Who runs to Cyprus to stash their cash, when the Caymans are so much closer?
Posted - 3/18/2013 11:47:38 AM | show profile | flag this post
Here's an 35-minute-old update from the Los Angeles Times:
ATHENS -- Lawmakers in Cyprus are scheduled to hold an emergency vote Monday on whether savers on the Mediterranean island will pay a levy of up to nearly 10% on bank deposits as part of a controversial international bailout plan that has enraged residents and sent financial markets swooning.
[Updated 7:10 a.m. March 18: But Yiannakis Omirou, the speaker of Parliament, later said the vote would be delayed until Tuesday evening to give the government time to amend the deal reached over the weekend, the Associated Press reported.]
Failure to approve the plan could spell massive bank runs and a chaotic government default that would further endanger the fate of Europe’s single currency, the euro, which is caught in a stubborn debt crisis.
Cypriot President Nicos Anastasiades, a conservative elected just three weeks ago, said in a nationally televised address Sunday that the deposit tax was the only alternative to a disorderly bankruptcy. The unprecedented scheme, part of a $13-billion bailout package hammered out by European officials over the weekend, would subject account holders with more than $130,000 to a 9.9% tax and those with less to a 6.75% levy.
Anastasiades acknowledged that the plan was painful, but said it would “eventually stabilize the economy and lead it to recovery.”
He vowed to try to modify some elements of the plan to protect small savers. The Reuters news agency reported Monday that officials were hoping to cut the tax to 3% for deposits under $130,000 and increase the rate to 12.5% for larger deposits.
Posted - 3/18/2013 11:56:01 AM | show profile | flag this post
I'll leave it to another poster to look up whether Cyprus is a popular place for offshore accounts. Switzerland and the Caymans, yes, but I've never heard of anyone stashing their cash in a Cypriot account.
Posted - 3/18/2013 12:01:07 PM | show profile | flag this post
Thanks for the updates.
I find this really disturbing in that the gov't will have access to private citizens bank accounts, and the banks already are refusing to allow account holders to withdraw their own cash, fearing a run on the banks.
Basically, if you have your money in a box under the bed, you don't have to pay.
If you have it in a bank? You can't withdraw it right now because the bank won't let you, and the gov't is planning on taking some of your money.
Chilling implications here.
Posted - 3/18/2013 12:11:44 PM | show profile | flag this post
Creditors demanded they levy...
... In order to bail out Cyprus ( as part of the whole EU financial crisis).
Countries aren't too big to fail and big banks will take their chunk of flesh.
But tone being hit are Russians here . Cyprus has become a big offshore location for the oligarchs
Russian banks’ cross-board loans to Cypriot-based Russian companies totaled $30-40bn at the end of 2012 – that is equal to 15-20 per cent of Russian banks’ capital base in Russia, and 5-6 per cent of their gross corporate loans.
Russian corporate deposits in Cyprus totaled an estimated $19bn at the end of August – an amount that is equal to 7 per cent of all the corporate deposits in Russia, excluding current accounts.
Posted - 3/18/2013 1:06:19 PM | show profile | flag this post
If anyone has been REALLY following this story
the concept was advanced by Eurozone leaders. A deal was agreed to on Saturday to bail out the Cypriot bank with $13 billion in loans but levy a tax of up to 10 percent on depositors.
The faux Canadian is right (for once in his/her life) in that the vast majority of the money in Cypress is from Russian businesses and wealthy Russian depositors. Vladimir Putin is unhappy...calling the measure "unfair." (I'd bet he's bitching because he's about to be heavily levied for the money he personally has in Cypress. Where did he get it? I have my suspicions.)
Posted - 3/18/2013 1:19:19 PM | show profile | flag this post
CNBC indicates that most of the money in Cyprus *does not* come from Russia:
" With an estimated 37 percent of the $68 billion of deposits in Cypriot banks belonging to foreigners, many of whom Russian investors and businesses according to experts, Cypriots are not the only savers that could lose money under the deal."
Posted - 3/18/2013 2:01:56 PM | show profile | flag this post
Several financial publications
say my assertion is accurate.
Posted - 3/18/2013 2:19:44 PM | show profile | flag this post
An important point to remember in Cyprus..
is that bank deposits are eight times greater than the country's economy.
I don't see how you can tax deposits. Once the cat's out of the bag, you get exactly what you're seeing in Cyprus -- a bank run.
In the end, you can't tax those deposits, because everyone's pulled their money out.
Posted - 3/18/2013 2:42:44 PM | show profile | flag this post
In fact they haven't
The banks have shut off their ATMs and embargoed withdrawals.
The Cypriot government, however, is working on a measure to soften the blow for small depositors.
Posted - 3/18/2013 7:07:16 PM | show profile | flag this post
I have my suspicions
Clearly this is Obama's work.
He pushed for the fluoridation of water in Cyprus after he was born there.
Then he insisted drones fly black helicopters to take away their guns.
Now he outlaws large sugary drinks and the banks collapse.
What's next? Gay marriage?
Posted - 3/19/2013 1:12:46 AM | show profile | flag this post
*** Several financial publications
say my assertion is correct ***
From the Wall Street Journal:
"By LUKAS I. ALPERT
MOSCOW—Russia on Monday blasted a proposal for a bank-deposit tax that would hit Russian customers with a $2 billion bill to help finance Cyprus's bailout, with President Vladimir Putin calling the move "dangerous" and "unfair," and officials warning they may have to reconsider restructuring a $3.3 billion loan to the island nation.
"The proposed move would impact Russian financial institutions, which hold more than $30 billion in accounts there, or roughly 30% of all Cypriot deposits. Russian officials said they weren't consulted on the proposal by euro-zone finance ministers and the International Monetary Fund, which Prime Minister Dmitry Medvedev likened to Soviet-era property seizures."
Posted - 3/19/2013 9:11:55 AM | show profile | flag this post
As a "professional" journalist
is that how you report?
Russian FINANCIAL INSTITUTIONS hold about 30 percent of the deposits in Cypriot banks. That's probably true.
However, Russian businesses and wealthy Russian citizens are also depositors.
Sorry, dearie, you're just not right on this one.
Posted - 3/20/2013 2:11:29 AM | show profile | flag this post
Sorry, junior buddy boy, but you're incorrect.
That's why the Wall Street Journal didn't quote you. It knew you pulled your "fact" out of thin air.
At least I quoted sources. You had nothing.
Posted - 3/20/2013 12:35:55 PM | show profile | flag this post
Which proves you're a know-nothing
You picked sources that reflect your political paradigm...not those that reflect facts.
Posted - 3/22/2013 10:21:28 PM | show profile | flag this post
Yet another one failed to quote our brilliant cruiser's insider knowledge of Russian holdings in Cyprus:
"By Sergei L. Loiko, Los Angeles Times
March 22, 2013, 4:08 p.m.
MOSCOW — Flights from snow-covered Russia to sunny Cyprus may be packed, but these days many of the passengers are bank account owners looking to pull their money out of the financially crippled island, not vacationers.
Russians own about a third of the $88 billion in deposits in Cyprus, which on Friday was operating under a European Central Bank warning to come up with $7.5 billion by Monday to qualify for a financial bailout. The financial mess has spooked many Russians — one proposal called for levies of up to 10% on bank deposits — at a time when Cyprus hopes Moscow will come through with financial assistance to help keep the country from falling into default."
Perhaps, cruiser, you can do a press-release blast to let all of these news outlets know how misinformed they are.
Posted - 3/22/2013 10:30:38 PM | show profile | flag this post
Here you go, Mr. Rude-and-Crude Media Faker: https://ireach.prnewswire.com/orders/price-options.aspx
Spread your IQ there for only $129.
Posted - 3/23/2013 9:54:21 AM | show profile | flag this post
Why don't they tax stock holdings? Because the wealthy have their money tied up there. The middle and lower classes have most their money tied up in banks. Just another way for the wealthy to stick it to the lower classes...