The extension of deposit guarantee from €20k to €100k will lure the binladens out into banks' savings, and that will compensate the flow from ordinary savings to government bonds. The net effect will be as if the bonds had been purchased with binladens. Maybe this is part of the reason for Spain raising the guarantee above the EU's agreed new minimum of €50k. Spain's per capita incomes are not among the highest in the Eurozone so it makes no sense that we'd have among the highest deposit guarantees.
Otherwise, if it works it will say something really weird about the Spanish political economy. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
The argument was that while the original amount is adequate for most households, it is not adequate for all small businesses bringing their payroll onto account. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
A pleasure I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude
My grandfather has bought all his last cars in cash! I doubt any tax free guarantee would make him bringing his money into a bank.
A grandfather of an uncle in law had 30,000 Euro in his basement. It was changed from DM to Euro and I think it was even totally legal income. There are simply weird people... Maybe it will work, when the interest is high enough. Der Amerikaner ist die Orchidee unter den MenschenVolker Pispers
But Spain already squeezed out a large amount of cash out of the underground economy in the late 80's and 90's. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
