Can We Trust The Banks Anymore ?

[EDDIE51]

With the news from Cyprus that 30% of deposits over 100,000 euros will be confiscated, and that ''this will be the precedent for future bailouts''
Can anyone trust a Bank again ?

[DaisyNonna]

Depends where you are fishing

[BAKERS DOZEN]

I am due to draw a lump sum from my pension in July and have seriously been looking at floor safes to put in the cellar. Sod the interest I just want to hold on to the capital.

[EDDIE51]

I heard about 1 guy who had just sold the business he had spent his life building up so had 150,000 Euro in the bank , now he has lost 30% of it.

[factor-fiction]

It must be a sickening feeling but I think the alternative- the failure of a some major banks in Cyprus - would have had worse consequences. Maybe in the long run it'll be a small price to pay for previous excesses in some economies and for some stability resulting from the bailout
It was of course the Cypriot government (some would say the EU) that took the money here; it wasn't the banks who made the decision.
I agree though that it's a worrying precedent that may have unintended consequences as many savers and businesses decide to keep their cash hidden or invest further afield

[emmie]

i had faith in them once, but not so much now, having said that isn't this the only way that Cyprus was going to get it's bailout, by taking money off it's depositors, so isn't that more a political decision than banking.
If this happened in UK, what would be the fallout...

[emmie]

according to the news many in Cyprus have been converting their cash into gold, seems a plan, however how to get your dosh out in the first place..
Once the Russians leave won't this cause mayhem in Cyprus, their tourist hot spots, restaurants, hotels, are the beneficiaries of their largesse it would seem. So what happens when they go, and go i am sure they will, as no one is going to want the bank to dip it's fingers again.

[factor-fiction]

If it happened here the £85000 guaranteed limit per saver per bank should offer protection to most of us. If the government had to renege on that though I think the trust in the system would fail and we'd be in such a crisis that money would become pretty meaningless.

[riptide]

Does this mean that if you hold one hundred thousand euros in different banks that you would not have to pay?

[factor-fiction]

Good question, riptide. I don't know exactly how that situation is to be handled but I think those savers who have spread their savings around would avoid the tax as I doubt anyone has the information/resources to investigate as the tax needs to be levied quickly before people remove/move around their savings. Having said that, those Russians with millions in the banks won't have had enough banks to share their money between so will still get hit

[Connemmara]

factor fiction just a basic yes or no cos it is too complicated for me

are you saying that if you have (which I have not of course) but if you have £85,000 in the bank (any bank?) and things went "wrong" you are covered by the government - I mean will the government stand by their word. Have I picked that up correct - cos watching to all these postings - I am beginning to feel like lifting what I have and put into a safe safe and I am mean a safe safe - it is not fair for the guy to lose 30% of his money after working so hard.

[factor-fiction]

I recall you are in Ireland (not sure if NI or Eire) so if the former I don't know about that, Connemmara.

[Connemmara]

i am in ni

[Connemmara]

can you find out for me wee pet - cos I am seriously thinking of the safe safe after all are we getting much interest out of anything

[sandyRoe]

It's a really bad idea to have large sums of cash around the house. If anyone felt they needed to have cash to hand they could hold it in a safe deposit box in the bank vault.
I think that this isn't going to be a problem that will give me sleepless nights.

[sandyRoe]

NI has the same rules when it comes to banking as the rest of the UK.

[factor-fiction]

In UK we are covered as per this
http://www.fsa.gov.uk/consumerinformation/compensation/fscs/limits.

But if it ever had to rely on it because major banks had gone bust we'd be in a very dire position. Things would be so bad it may not make much difference whether the government sticks to it or reneges on it. If the financial system collapses it wouldn't make much difference where your money was.

[Connemmara]

well then sandyroe you are in ni - would you just leave your money in isas or whatever you money is in - leave well alone would you

[Connemmara]

factor fiction surely it would make a difference if it was in a safe safe.

[factor-fiction]

Sorry sandy- I meant to say the latter (Eire) not the former (NI, which I know is part of the UK)