News of a forced bailout of Cypriot banks should come as good news to us over here.
Savers will be forced to pries open their accounts to the tune of 10%, ok if you are sniveling leftie who has contributed to the collapse but this leaves out the vast numbers of unemployed, students, teachers etc who also contributed.
This would best be avoided through an overall tax of 10% on individuals incomes for 2-3 years. That, way no individual could avoid it unless they were unemployed the full 3 years.
Of course this is bad news and unfair on all those who paid their own way, and continue to but life is unfair, I guess.
But the real consequences for us is that the same thing could happen here. Under our own
Open Bank Resolution ,(RBS) (
Brought to you by Leighton Smith and my mate at The Lost Soul blog)
" The OBR policy is designed to ensure that first losses are borne by the bank’s existing shareholders. In addition, a portion of depositors’ and other unsecured creditors’ funds will be frozen to bear any remaining losses. To the extent that these funds are not required to cover losses as more detailed assessment of the position of the bank is completed, these funds will be released to depositors. At a high level, this outcome replicates the outcome that would apply in the event that a failed bank was liquidated. The primary advantage of the OBR scheme, however, is that depositors would have access to a large proportion of their balances throughout the process. This contrasts with what would happen under a normal liquidation, where depositors might not have access to any of their funds for a significant period."
NO, no no.
Most people who put their money into bank accounts the buck stops at their accounts they are not, and do not participate in the banks profits, or in this case the banks (sort of - they are govts that are intervening on their own (govts) losses) losses.
In this case it is clearly wrong headed to do, would cause panic and would clearly be an election loser.
Will it happen here?
In theory yes but our banks are
among the safest in the world (read the
august 2012 PWC report ) but should they really
need to they have free pass.
That should worry us all.
Banks @ Share Investor
