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(NBC News)   What's the best way to discourage people from withdrawing their own money and creating a run on the banks? Keep the banks closed, perhaps indefinitely, of course. They'll show those depositors   (worldnews.nbcnews.com) divider line 110
    More: Followup, Schaeuble, Mediterranean islands, Cyprus, Cypriot, money markets  
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8716 clicks; posted to Main » on 20 Mar 2013 at 12:20 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-03-20 11:39:03 AM
The top two banks are technically insolvent right now, though the EU would be foolish to not cover them.  There are some reports floating around that one of the two has already been sold wholesale to the Russians, which would keep it afloat.

This whole thing has been a farkup of the highest magnitude.  Cyprus' PM apparently proposed the levy on everyone, because the EU bankers had floated a levy and he was worried about pissing off his Russian friends.  So the levy, instead of being only put on these accounts supposedly used for laundering money - a charge that is continuously made by the EU, but a glance at the facts shows it isn't that simple.  Those two banks have been checked multiple times by the EU for proof of laundering money.  They've found nothing.  Germany itself has been found more guilty of money laundering than Cyprus is.  The charges remain constantly levied at Cyprus.  So, the PM decides that instead of a heavy levy on only those top accounts the levy hits everyone.  The EU agrees and for some reason assumes that nobody will have a problem with this.  Multiple media reports indicate the EU banking commission has been flabbergasted that people are mad at this deal.  The deal is rejected, and now they're looking for something else.

But despite EU protests to the contrary, this little failed deal is likely to have far reaching consequences.  They've just told people with money in the banks of Italy, Spain, Portugal and any other country that might need a bailout in the near future that your deposits are not safe from a levy.  There is now no reason to believe the EU is trustworthy and is capable of making rational decisions to address the Eurozone crisis.  They clearly have no idea what might be a bad deal.  The Euro is now almost certainly doomed, and with the people running it, I see no reason to think that's a bad thing.
 
2013-03-20 11:48:27 AM
Bank holidays are actually relatively common during crisis. I think the banks in Michigan once closed for over a month during the Great Depression.
 
2013-03-20 12:24:02 PM
did they also shut down online banking?
 
2013-03-20 12:24:45 PM
Its always easy to empty a checking account at least - just write yourself a check.
 
2013-03-20 12:26:06 PM

jshine: Its always easy to empty a checking account at least - just write yourself a check.


But who is going to accept it?
 
2013-03-20 12:27:51 PM
So, I have to ask, Cyprus has a population of 1.1 million, yet their banks going insolvent lead to all kinds of doom and gloom and dire predictions about what it will do the the global economy.  How the fark does that work?  Are the Cypriots the Illuminati and the wealth of the world was in that bank?  Or perhaps Cyprus is Europe's version of the Grand Caymans and a favored spot to hide funds?  How on earth is  one little island that spends most of its time being occupied by Greece or Turkey able to fark so much shiat up...
 
2013-03-20 12:27:58 PM
FTFA:  "At the end of the day we're only talking about an additional seven to eight billion dollars of additional money that is needed to have a complete package for Cyprus, this is small change for Russia."

FFS, how can I get some of that small change?
 
2013-03-20 12:31:55 PM

haterade: did they also shut down online banking?


That won't let you withdraw physical money, and by all accounts, every ATM on the island is empty at this point.

ha-ha-guy: So, I have to ask, Cyprus has a population of 1.1 million, yet their banks going insolvent lead to all kinds of doom and gloom and dire predictions about what it will do the the global economy.  How the fark does that work?  Are the Cypriots the Illuminati and the wealth of the world was in that bank?  Or perhaps Cyprus is Europe's version of the Grand Caymans and a favored spot to hide funds?  How on earth is  one little island that spends most of its time being occupied by Greece or Turkey able to fark so much shiat up...


Their banking debt, mostly accrued when the EU reduced the value of Greek bonds by 80%, is equal to the GDP of their country.  Before the EU wrecked those bonds, there was plenty of money to cover the savings in the banks.
 
2013-03-20 12:32:22 PM
I hate EU banknazis
 
2013-03-20 12:32:32 PM

ha-ha-guy: How on earth is one little island that spends most of its time being occupied by Greece or Turkey able to fark so much shiat up...


its become the new Cayman for crime syndicates in that part of the world. Russians, Turks, etc...
 
2013-03-20 12:33:48 PM

GAT_00: Their banking debt, mostly accrued when the EU reduced the value of Greek bonds by 80%, is equal to the GDP of their country.  Before the EU wrecked those bonds, there was plenty of money to cover the savings in the banks.


Ah, they were invested heavily in Greek bonds, so they're morons.
 
2013-03-20 12:35:21 PM
I'm gonna need a bigger mattress....
 
2013-03-20 12:39:10 PM

WeenerGord: FTFA:  "At the end of the day we're only talking about an additional seven to eight billion dollars of additional money that is needed to have a complete package for Cyprus, this is small change for Russia."

FFS, how can I get some of that small change?


Goofus is a dumbass and wastes/loses his money
Galant is cautious and saves some of his money

Goofus is now in a totally screwed position.
Galant could throw Goofus a few bucks and bail him out.

How many times would Galant need to bail Goofus out if Goofus is always going to be a dumbass?
 
2013-03-20 12:40:46 PM

Tricky Chicken: WeenerGord: FTFA:  "At the end of the day we're only talking about an additional seven to eight billion dollars of additional money that is needed to have a complete package for Cyprus, this is small change for Russia."

FFS, how can I get some of that small change?

Goofus is a dumbass and wastes/loses his money
Galant is cautious and saves some of his money

Goofus is now in a totally screwed position.
Galant could throw Goofus a few bucks and bail him out.

How many times would Galant need to bail Goofus out if Goofus is always going to be a dumbass?


Are we pretending that nothing Goofus does could ever affect Gallant?
 
2013-03-20 12:40:51 PM

ha-ha-guy: GAT_00: Their banking debt, mostly accrued when the EU reduced the value of Greek bonds by 80%, is equal to the GDP of their country.  Before the EU wrecked those bonds, there was plenty of money to cover the savings in the banks.

Ah, they were invested heavily in Greek bonds, so they're morons.


Oh, you're just an asshole.  My bad, I thought you were actually interested in a real problem of immense scale.  You just want to find someone to be superior to based on your own perception of right and wrong.
 
2013-03-20 12:41:03 PM
Iceland seen laughing in the corner?
 
2013-03-20 12:41:27 PM

ha-ha-guy: So, I have to ask, Cyprus has a population of 1.1 million, yet their banks going insolvent lead to all kinds of doom and gloom and dire predictions about what it will do the the global economy.  How the fark does that work?  Are the Cypriots the Illuminati and the wealth of the world was in that bank?  Or perhaps Cyprus is Europe's version of the Grand Caymans and a favored spot to hide funds?  How on earth is  one little island that spends most of its time being occupied by Greece or Turkey able to fark so much shiat up...


It's not Cyprus banking by itself, it's the credit of all EU banks.  Imagine if the FDIC suddenly said, "We're not guaranteeing any banks accounts in Indiana and money in those accounts could be lost."  No one would have confidence in any of the FDIC and Fed guarantees for any of the U.S. banking system.  That's what Europe is looking at.  If the European Central Bank is allowing its account guarantees to be voided, anyone with the ability is going to transfer their money to the U.S. and Asia and Europe will collapse overnight.
 
2013-03-20 12:41:43 PM
Pay the levy and you might save the rest of your money. Don't pay the levy and you might lose all of it.

Farking robbed either way.
 
2013-03-20 12:44:23 PM
Do these bank executives not live in Cyprus?  Can't understand why they are haven't been marched to the "town square" yet, so to say?
 
2013-03-20 12:46:07 PM

ArkPanda: It's not Cyprus banking by itself, it's the credit of all EU banks. Imagine if the FDIC suddenly said, "We're not guaranteeing any banks accounts in Indiana and money in those accounts could be lost." No one would have confidence in any of the FDIC and Fed guarantees for any of the U.S. banking system. That's what Europe is looking at. If the European Central Bank is allowing its account guarantees to be voided, anyone with the ability is going to transfer their money to the U.S. and Asia and Europe will collapse overnight.


There's a further problem.  The ECB has actually said that to guarantee your account from a failure out of your control, you must pay a substantial percentage of your own savings.  There would be no reason to actually trust the FDIC/ECB to do anything to help you.  The very value of the Euro is now questionable.
 
2013-03-20 12:58:39 PM
Kinda makes me want to go get the kids' college fund out of the system and put into, I dunno, gold or something that can't easily be confiscated at a whim.
 
2013-03-20 12:59:22 PM
If you can't kick Cyprus out of the Eurozone then who can you?
 
2013-03-20 01:00:50 PM

scarmig: Kinda makes me want to go get the kids' college fund out of the system and put into, I dunno, gold or something that can't easily be confiscated at a whim.


The kids college fund probably shouldn't be in a bank account depending on age.
 
2013-03-20 01:01:00 PM

GAT_00: ArkPanda: It's not Cyprus banking by itself, it's the credit of all EU banks. Imagine if the FDIC suddenly said, "We're not guaranteeing any banks accounts in Indiana and money in those accounts could be lost." No one would have confidence in any of the FDIC and Fed guarantees for any of the U.S. banking system. That's what Europe is looking at. If the European Central Bank is allowing its account guarantees to be voided, anyone with the ability is going to transfer their money to the U.S. and Asia and Europe will collapse overnight.

There's a further problem.  The ECB has actually said that to guarantee your account from a failure out of your control, you must pay a substantial percentage of your own savings.  There would be no reason to actually trust the FDIC/ECB to do anything to help you.  The very value of the Euro is now questionable.


Yea it's pretty much a no brainer for the account holder. "Hmm, do I want to give up 10% of my money to protect the other 90% so I can continue to receive this awesome 0.25% intrest rate, or should I just take my money out and trade it for some canned food toilet toliet paper to survive the now enviable meltdown?"
 
2013-03-20 01:03:51 PM

mizchief: GAT_00: ArkPanda: It's not Cyprus banking by itself, it's the credit of all EU banks. Imagine if the FDIC suddenly said, "We're not guaranteeing any banks accounts in Indiana and money in those accounts could be lost." No one would have confidence in any of the FDIC and Fed guarantees for any of the U.S. banking system. That's what Europe is looking at. If the European Central Bank is allowing its account guarantees to be voided, anyone with the ability is going to transfer their money to the U.S. and Asia and Europe will collapse overnight.

There's a further problem.  The ECB has actually said that to guarantee your account from a failure out of your control, you must pay a substantial percentage of your own savings.  There would be no reason to actually trust the FDIC/ECB to do anything to help you.  The very value of the Euro is now questionable.

Yea it's pretty much a no brainer for the account holder. "Hmm, do I want to give up 10% of my money to protect the other 90% so I can continue to receive this awesome 0.25% intrest rate, or should I just take my money out and trade it for some canned food toilet toliet paper to survive the now enviable meltdown?"


The difficulty in this situation is that Cypriots can't actually get to their money to take it out.
 
2013-03-20 01:07:28 PM

qorkfiend: Tricky Chicken: WeenerGord: FTFA:  "At the end of the day we're only talking about an additional seven to eight billion dollars of additional money that is needed to have a complete package for Cyprus, this is small change for Russia."

FFS, how can I get some of that small change?

Goofus is a dumbass and wastes/loses his money
Galant is cautious and saves some of his money

Goofus is now in a totally screwed position.
Galant could throw Goofus a few bucks and bail him out.

How many times would Galant need to bail Goofus out if Goofus is always going to be a dumbass?

Are we pretending that nothing Goofus does could ever affect Gallant?


Hell, I'm pretending that Goofus and Galant are people.  How screwed is europe if Cyprus fails? Or Greece?
 
2013-03-20 01:08:07 PM

qorkfiend: mizchief: GAT_00: ArkPanda: It's not Cyprus banking by itself, it's the credit of all EU banks. Imagine if the FDIC suddenly said, "We're not guaranteeing any banks accounts in Indiana and money in those accounts could be lost." No one would have confidence in any of the FDIC and Fed guarantees for any of the U.S. banking system. That's what Europe is looking at. If the European Central Bank is allowing its account guarantees to be voided, anyone with the ability is going to transfer their money to the U.S. and Asia and Europe will collapse overnight.

There's a further problem.  The ECB has actually said that to guarantee your account from a failure out of your control, you must pay a substantial percentage of your own savings.  There would be no reason to actually trust the FDIC/ECB to do anything to help you.  The very value of the Euro is now questionable.

Yea it's pretty much a no brainer for the account holder. "Hmm, do I want to give up 10% of my money to protect the other 90% so I can continue to receive this awesome 0.25% intrest rate, or should I just take my money out and trade it for some canned food toilet toliet paper to survive the now enviable meltdown?"

The difficulty in this situation is that Cypriots can't actually get to their money to take it out.


Which means when they DO reopen them, we are going to see exactly how long it takes to clean out a bank in the Internet age.  Probably less than a minute.  The EU/Cyprus government can still avert that but it's going to take something pretty amazing at this point.
 
2013-03-20 01:08:40 PM

Alphakronik: Do these bank executives not live in Cyprus?  Can't understand why they are haven't been marched to the "town square" yet, so to say?


That's one thing I like about china, the government will shoot your ass for messing up this bad.
 
m00
2013-03-20 01:08:48 PM

scarmig: Kinda makes me want to go get the kids' college fund out of the system and put into, I dunno, gold or something that can't easily be confiscated at a whim.


What, are you some sort of Ron Paul loving weirdo?
 
2013-03-20 01:09:58 PM

weapon13: Pay the levy and you might save the rest of your money. Don't pay the levy and you might lose all of it.

Farking robbed either way.


OR...

Pick up a rifle and kill all the farking bastards that caused the problem in the first place.  Loot whatever remains.  Then rebuild a society where fraud is rewarded with death.
 
2013-03-20 01:10:00 PM
The issue is much larger than Cyprus.  If you have a bank account in Italy or Spain, you have to wondering how long until the EU tells your government to swoop in and confiscate %10 of your savings.  If this happens, expect to see a run on the banks across Europe.
 
2013-03-20 01:13:47 PM

Alphakronik: Do these bank executives not live in Cyprus?  Can't understand why they are haven't been marched to the "town square" yet, so to say?



No they don't. The ones that proposed this are the farkwads on the mainland. Think of them as the European equivelant of the fast money fartknockers who work in Washington at Ben Bernanke's office and Congress and then pop up to wall street for a round of golf with their friends- only they use a dimebag as the ball, a briefcase full of cash as the club and a hooker as the caddy.
 
2013-03-20 01:14:37 PM
if someone really launders big amounts of money, they are clever enough to not be caught by these silly bank/goverment games.

the only people this tactic affects are those who painstakingly saved their taxed money in a bank account

not anyone who owns untaxed millions
 
2013-03-20 01:15:26 PM

BizarreMan: jshine: Its always easy to empty a checking account at least - just write yourself a check.

But who is going to accept it?


I sure as hell wouldn't take a check from me.
 
m00
2013-03-20 01:21:21 PM

Otto_E_Rodika: The issue is much larger than Cyprus.  If you have a bank account in Italy or Spain, you have to wondering how long until the EU tells your government to swoop in and confiscate %10 of your savings.  If this happens, expect to see a run on the banks across Europe.


Well, Germany is getting wise. You don't have to control Europe through military conquest... there's also economic oppression.
 
2013-03-20 01:24:48 PM

Smeggy Smurf: Then rebuild a society where fraud is rewarded with death.


Isn't that the French Revolution?  I'm not sure you'd like the outcome.
 
2013-03-20 01:28:27 PM

Otto_E_Rodika: If you have a bank account in Italy or Spain, you have to wondering how long until the EU tells your government to swoop in and confiscate %10 of your savings


How much is Obama spending and what happens when he runs out of cash?  Could it happen here?
 
2013-03-20 01:28:44 PM

Tricky Chicken: Hell, I'm pretending that Goofus and Galant are people.  How screwed is europe if Cyprus fails? Or Greece?


The fear is, I believe, that if a Eurozone bank is allowed to fail and the depositors lose their money, then there will be capital flight from Eurozone banks which are in a bad way - i.e. if Cyprus fails and the EU doesn't save them, what reason do the citizens of Greece, Italy and Spain have to believe the EU would ever ave them, considering they are much harder to save? If those citizens start to believe that, they will take the money out of their own banks and put them in German or Dutch banks - since the Euro is fungible, why not? This would lead to a cascade failure of the banking system as you'd see bank runs in many different countries.
 
2013-03-20 01:40:26 PM

GAT_00: The top two banks are technically insolvent right now, though the EU would be foolish to not cover them.  There are some reports floating around that one of the two has already been sold wholesale to the Russians, which would keep it afloat.

This whole thing has been a farkup of the highest magnitude.  Cyprus' PM apparently proposed the levy on everyone, because the EU bankers had floated a levy and he was worried about pissing off his Russian friends.  So the levy, instead of being only put on these accounts supposedly used for laundering money - a charge that is continuously made by the EU, but a glance at the facts shows it isn't that simple.  Those two banks have been checked multiple times by the EU for proof of laundering money.  They've found nothing.  Germany itself has been found more guilty of money laundering than Cyprus is.  The charges remain constantly levied at Cyprus.  So, the PM decides that instead of a heavy levy on only those top accounts the levy hits everyone.  The EU agrees and for some reason assumes that nobody will have a problem with this.  Multiple media reports indicate the EU banking commission has been flabbergasted that people are mad at this deal.  The deal is rejected, and now they're looking for something else.

But despite EU protests to the contrary, this little failed deal is likely to have far reaching consequences.  They've just told people with money in the banks of Italy, Spain, Portugal and any other country that might need a bailout in the near future that your deposits are not safe from a levy.  There is now no reason to believe the EU is trustworthy and is capable of making rational decisions to address the Eurozone crisis.  They clearly have no idea what might be a bad deal.  The Euro is now almost certainly doomed, and with the people running it, I see no reason to think that's a bad thing.


I agree with GAT_00.  With one minor exception.  People knew that there was a real possibility of losing deposits in these banks a long time ago.  If any of the PIIGS countries leave (or are kicked out) of the Euro, some loss of funds denominated in Euros is inevitable.  They will take the money currently in your account currently denominated in Euros, and replace it with an 'identical' amount of money denominated in Drachma (or Lira, or Peseta, etc.).  Of course, the ratio of new currency to old will be arbitrary, will almost certainly be different for different groups of people depending on how much influence you have, and will be worth far less in its new form than it was in the old, and you will not be able to move it or spend it for a substantial period before and after the transition.
 
2013-03-20 01:40:46 PM
The damage is already done.

The people raised a significant stink this time, so they called it off.

Next time there will be no warning, they will just do it.  You will wake up 10% poorer.

Watch it coming to Amerika, sooner than you might think.
 
2013-03-20 01:48:54 PM

DamnYankees: Tricky Chicken: Hell, I'm pretending that Goofus and Galant are people.  How screwed is europe if Cyprus fails? Or Greece?

The fear is, I believe, that if a Eurozone bank is allowed to fail and the depositors lose their money, then there will be capital flight from Eurozone banks which are in a bad way - i.e. if Cyprus fails and the EU doesn't save them, what reason do the citizens of Greece, Italy and Spain have to believe the EU would ever ave them, considering they are much harder to save? If those citizens start to believe that, they will take the money out of their own banks and put them in German or Dutch banks - since the Euro is fungible, why not? This would lead to a cascade failure of the banking system as you'd see bank runs in many different countries.


So...Mr Itallian takes his euros out of Bank of Italy and deposits it into Bank of Germany. Bank of Italy fails.  Bank of Germany now has numerous customers in Italy, so they open branch offices in Italy.  Hey, whadda ya know, there is this nice empty bank building in Mr. Itallian's neighborhood!  Lets just slap our name on it and we are open for business.

grossly oversimplified?
 
2013-03-20 01:59:25 PM

Tricky Chicken: DamnYankees: Tricky Chicken: Hell, I'm pretending that Goofus and Galant are people.  How screwed is europe if Cyprus fails? Or Greece?

The fear is, I believe, that if a Eurozone bank is allowed to fail and the depositors lose their money, then there will be capital flight from Eurozone banks which are in a bad way - i.e. if Cyprus fails and the EU doesn't save them, what reason do the citizens of Greece, Italy and Spain have to believe the EU would ever ave them, considering they are much harder to save? If those citizens start to believe that, they will take the money out of their own banks and put them in German or Dutch banks - since the Euro is fungible, why not? This would lead to a cascade failure of the banking system as you'd see bank runs in many different countries.

So...Mr Itallian takes his euros out of Bank of Italy and deposits it into Bank of Germany. Bank of Italy fails.  Bank of Germany now has numerous customers in Italy, so they open branch offices in Italy.  Hey, whadda ya know, there is this nice empty bank building in Mr. Itallian's neighborhood!  Lets just slap our name on it and we are open for business.

grossly oversimplified?


Sure. What about the guy in line behind Mr. Itallian, who can't get his money because Mr. Itallian emptied his accounts all at the same time and the bank has no more cash on hand to disburse?
 
2013-03-20 02:02:38 PM
It's almost as if the EU bankers want their cake and eat it too. They like having all these countries with interconnected banks and financial arrangements, all using the same currency. But, when one country's banks start having trouble, well, it's that country and that country alone that needs to stop spending and fix this problem!

Except, there's no way Cyprus can repair their banks; it doesn't have the money and its economy is nowhere big enough to absorb the loss. So they try to take funds out of depositors' accounts to make up the difference? It's a wonder that Cypriots aren't using bulldozers to rip open the banks instead of just using them to block the entrances.

/Cyprus banks will be empty within an hour of opening, whenever that is
//won't matter if Russia bails them out or not
 
2013-03-20 02:02:48 PM

Tricky Chicken: DamnYankees: Tricky Chicken: Hell, I'm pretending that Goofus and Galant are people.  How screwed is europe if Cyprus fails? Or Greece?

The fear is, I believe, that if a Eurozone bank is allowed to fail and the depositors lose their money, then there will be capital flight from Eurozone banks which are in a bad way - i.e. if Cyprus fails and the EU doesn't save them, what reason do the citizens of Greece, Italy and Spain have to believe the EU would ever ave them, considering they are much harder to save? If those citizens start to believe that, they will take the money out of their own banks and put them in German or Dutch banks - since the Euro is fungible, why not? This would lead to a cascade failure of the banking system as you'd see bank runs in many different countries.

So...Mr Itallian takes his euros out of Bank of Italy and deposits it into Bank of Germany. Bank of Italy fails.  Bank of Germany now has numerous customers in Italy, so they open branch offices in Italy.  Hey, whadda ya know, there is this nice empty bank building in Mr. Itallian's neighborhood!  Lets just slap our name on it and we are open for business.

grossly oversimplified?


Banks don't really work that way. A bank doesn't actually have all the money to cover all its deposits. So when a bank run happens, people get farked. They can't get their money out.
 
2013-03-20 02:03:04 PM
Won't be too long until we are in the same shape.

We will take the world down with us though.
 
2013-03-20 02:07:00 PM

Smeggy Smurf: weapon13: Pay the levy and you might save the rest of your money. Don't pay the levy and you might lose all of it.

Farking robbed either way.

OR...

Pick up a rifle and kill all the farking bastards that caused the problem in the first place.  Loot whatever remains.  Then rebuild a society where fraud is rewarded with death.


I'm not really a tin foil hat guy, but why do you think an "assault" weapons ban was proposed/floated through the US Congress.  I personally don't think it's got much to do with Sandy Hook.

Historically.....Why do you rob banks?  That's where the money is.
http://en.wikipedia.org/wiki/Willie_Sutton

Modernized up.....Why do you tax bank deposits?  That's where the money is.
 
2013-03-20 02:07:36 PM
"No...your money's not here..."

reske.us
 
2013-03-20 02:21:33 PM

Tricky Chicken: qorkfiend: Tricky Chicken: WeenerGord: FTFA:  "At the end of the day we're only talking about an additional seven to eight billion dollars of additional money that is needed to have a complete package for Cyprus, this is small change for Russia."

FFS, how can I get some of that small change?

Goofus is a dumbass and wastes/loses his money
Galant is cautious and saves some of his money

Goofus is now in a totally screwed position.
Galant could throw Goofus a few bucks and bail him out.

How many times would Galant need to bail Goofus out if Goofus is always going to be a dumbass?

Are we pretending that nothing Goofus does could ever affect Gallant?

Hell, I'm pretending that Goofus and Galant are people.  How screwed is europe if Cyprus fails? Or Greece?


It's not so much (direct) economic failure as it is political failure.  The politicians (in almost every party) promise to the people that every step of tighter integration in the EU is going to be a good thing.  If Cyprus and/or Greece fail, then the whole thing starts to unravel and the promise turns out to be a big whopper of a lie.  And then the entire democratic structure of Europe comes into question.

And that's when the neo-Nazis, the radical Greens, and the leftover Communists get lots of votes.
 
2013-03-20 02:22:12 PM

DamnYankees: Tricky Chicken: DamnYankees: Tricky Chicken: Hell, I'm pretending that Goofus and Galant are people.  How screwed is europe if Cyprus fails? Or Greece?

The fear is, I believe, that if a Eurozone bank is allowed to fail and the depositors lose their money, then there will be capital flight from Eurozone banks which are in a bad way - i.e. if Cyprus fails and the EU doesn't save them, what reason do the citizens of Greece, Italy and Spain have to believe the EU would ever ave them, considering they are much harder to save? If those citizens start to believe that, they will take the money out of their own banks and put them in German or Dutch banks - since the Euro is fungible, why not? This would lead to a cascade failure of the banking system as you'd see bank runs in many different countries.

So...Mr Itallian takes his euros out of Bank of Italy and deposits it into Bank of Germany. Bank of Italy fails.  Bank of Germany now has numerous customers in Italy, so they open branch offices in Italy.  Hey, whadda ya know, there is this nice empty bank building in Mr. Itallian's neighborhood!  Lets just slap our name on it and we are open for business.

grossly oversimplified?

Banks don't really work that way. A bank doesn't actually have all the money to cover all its deposits. So when a bank run happens, people get farked. They can't get their money out.


Only the last people.

hocho064: "No...your money's not here..."

[reske.us image 320x240]


The first guy got ALL his money IIRC.
 
2013-03-20 02:25:16 PM
25.media.tumblr.com 25.media.tumblr.com
25.media.tumblr.com 24.media.tumblr.com
Bart: What do you mean the bank is out of money?

Bart: Insolvent?

Bart: Only have enough cash for the next three customers?

Bank Manager: Whoa, whoa, I don't have your money here! It's at Bill's house... and Fred's house!

Moe: What the hell you doing with my money at your house, Fred?
 
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