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CNBC: Cyprus Finance Minister: We Hope People Will Believe Us (17 Mar 2013)
Cyprus Finance Minister Michael Sarris told CNBC that there will be no capital restrictions and that people will be able to move their money out of the country on Tuesday after banks re-open.

The Cyprus government announced a bank holiday on Monday and temporary halted all electronic bank transfers after a euro zone bailout imposed a levy of as much as 10 percent on bank deposits. The levy is due to go into effect on Tuesday.

...

"Absolutely, there is no capital restrictions, people can move. We hope people will believe us, believe the collective leadership of the European Union, that this was a necessary step, but a single shot at the problem, and that from now on they can be very confident that nothing will happen to their savings," Sarris said in Brussels.



I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Mar 17th, 2013 at 01:28:17 PM EST
Yeah, I feel like totally confident in Mr. Panicos and co.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sun Mar 17th, 2013 at 01:29:17 PM EST
[ Parent ]
No capital restrictions?

I expect Cyprus banks to be empty by Wednesday then...

by Metatone (metatone [a|t] gmail (dot) com) on Sun Mar 17th, 2013 at 01:32:36 PM EST
[ Parent ]
You guys are freaking me out.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Mar 17th, 2013 at 01:36:21 PM EST
[ Parent ]
The real fun starts when people in Italy and Spain realise this means that they are due for a haircut sometime soon and start trying to move all their money into Swiss and German banks...
by Metatone (metatone [a|t] gmail (dot) com) on Sun Mar 17th, 2013 at 02:46:53 PM EST
[ Parent ]
the poor and middle class (wage earners) need local bank accounts and don't have a lot of savings (or net positive cash) anyway. It's the upper middle class and the rich who have liquid assets in banks to worry about.

This could have interesting political repercussions...

Wind power

by Jerome a Paris (etg@eurotrib.com) on Sun Mar 17th, 2013 at 02:56:04 PM EST
[ Parent ]
The guillotine might be pulled out of storage...

[according to Wiki, it has been used in Germany too...]

by Bernard on Sun Mar 17th, 2013 at 05:27:48 PM EST
[ Parent ]
JaP
It's the upper middle class and the rich who have liquid assets in banks to worry about.

Que Business Insider: ZERVOS: 'This Is A Nuclear War On Savings And Wealth'

What happened to Cyprus on Friday evening was one of the most significant developments in the Eurozone since the Greek election last summer. To tax the bank deposits of savers sends an ominous message to the entire global investment community. All of us should really take a moment to consider what the governments of Europe have done. To be clear, they initiated a surprise assault on the precautionary savings of their own people. Such a move should send shock waves across the entire population of the developed world. This was not a Bernanke style slow moving financial repression against risk free savings that is meant to stir up animal spirits and force risk taking. This is a nuclear war on savings and wealth - something that will likely crush animal spirits. This is a policy move you expect from a dictatorial regime in sub-Saharan Africa, not in an EMU member state. If the European governments can clandestinely expropriate 7 to 10 percent of their hard working citizen's precautionary savings after the close of business on a Friday night, what else are they capable of doing? Why even hold money in a bank account? Are they trying to start a bank run?

....

...if the Cypriot parliament agrees to the tax, we should also see some serious instability develop at peripheral banks. Why keep your money at a Spanish or Italian bank when you can jump to Germany or France. And why even keep money in the Euroarea banking system at all. We should see huge outflows. Maybe I'm wrong and deposits stay sticky, but the risks here are HUGE and SCARY.

Right now, I would argue that the risk of an EMU exit by Cyprus is real. And this is much more of a clear and present danger than anything happening in Italy or Spain. And even without passage of the tax, the potential for a bank run is very real. As a consequence, these events are MUCH MORE important than the Italian election results, or frankly any other issue in Europe. (Emphasis from BI)




"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Mar 17th, 2013 at 10:58:38 PM EST
[ Parent ]
The poor and the middle class (wage earners) will take their money out and put it under the mattress. Losing 10% is all the more damaging for them.

If European leaders are lucky it will be a while before people work this out, but if not, the bank runs will be vicious.

by Metatone (metatone [a|t] gmail (dot) com) on Mon Mar 18th, 2013 at 05:22:35 AM EST
[ Parent ]
I'm interested in the speculation that this is simply a sign of condescending impatience with the rest of Europe's spendthrift lazy socialist ways in Germany, and it's a prelude to a grand fuck-you foot-stomping exit by Berlin.

Which doesn't actually make any economic sense at all, and would be ruinous for everyone, including the German establishment.

But it's axiomatic that crazy people are crazy. So I suppose anything is possible.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Mar 18th, 2013 at 03:01:44 PM EST
[ Parent ]
from La La Land.

...people will be able to move their money out of the country on Tuesday after banks re-open.

They are INSANE.  With electronic transfer systems Cypriot banks will face a run by depositors 2.5 seconds after they open on Tuesday and will be insolvent 10 seconds after they open.  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Sun Mar 17th, 2013 at 02:02:04 PM EST
[ Parent ]
Illiquid.

If they are insolvent, then they already are.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Mar 17th, 2013 at 02:09:03 PM EST
[ Parent ]
How about illiquid and insolvent?

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Sun Mar 17th, 2013 at 02:14:16 PM EST
[ Parent ]
I suppose that the rational response in the southern parts of the Reich would be a bank run. But I very much doubt that will happen in a large scale.

I often times wonder if people are not getting what they deserve: with their complacent behaviour towards the gangsters that are in power. Not to say the belief that "that will not happen here" (maybe the Greeks will relate to Cyprus, but west from there? I doubt).

For various reasons, I would LIKE to see a bank run in the South: that would suggest people are thinking and being pro-active. Also, it would force a change in the policy of destruction currently ongoing. Granted, in the short run it would be bad, but I am not sure in the long run...

by cagatacos on Sun Mar 17th, 2013 at 02:25:25 PM EST
[ Parent ]
The small depositors aren't the immediate Trigger Point problem. ECB is risking Capital Flight:

...occurs when assets or money rapidly flow out of a country, due to an event of economic consequence.

by a small number of trans-national large depositors which could have serious (Read:  ah-YEE!) negative  effects and impacts on the $700 TRILLION global derivative market.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Sun Mar 17th, 2013 at 02:44:05 PM EST
[ Parent ]
 
the $700 TRILLION global derivative market

The tail that wags the world could get rather active next week.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Mar 17th, 2013 at 02:53:45 PM EST
[ Parent ]

There were fears of a run on deposits by Russian, Greek and British account-holders who are estimated to control almost half the €68bn of deposits in the Cypriot system when the system reopens.

All if which had good reason to keep their money in Cyprus (as opposed to, say, in Germany) and no obvious other place to go (although the inconvenience of the other places will be less when compared to Cyprus itself, now, presumably)

Wind power

by Jerome a Paris (etg@eurotrib.com) on Sun Mar 17th, 2013 at 02:52:43 PM EST
[ Parent ]
If you need to say
We hope people will believe us, believe the collective leadership of the European Union
you're doing it wrong.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Mar 17th, 2013 at 06:32:58 PM EST
[ Parent ]

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