Bank deposits may be at risk - Irish Times

Cody Pomeray

srsly78 wrote: »

The "unlimited guarantee" expired in 2010, you should pay more attention to important stuff like this.

I'm not talking about the blanket guarantee.

I'm saying that deposit insurance seems pretty pointless if there is an expectation that Government cannot realistically touch large depositors. It's an argument against those who say deposits can never be touched.

What I take issue with is a statement like 'it was always on the cards' which I think exaggerates the prospect - historic or current - of such an eventuality by a really substantial degree.

http://idioms.thefreedictionary.com/on+the+cards
http://dictionary.cambridge.org/dictionary/british/be-on-the-cards

BKtje

antoobrien wrote: »

We were also told that we should dump the Euro for Swiss Francs. Anybody who has invested since July 2011 has lost up to 10% of their investment value as the euro gets stronger against the swiss franc.

Euro rose 10% verses the Swiss franc? That's news to me!
The euro dropped continually vs the franc from 1 euro = 150 ish chf down to momentary parity before the Swiss national bank applied a floor at 1.20 over two years ago. It has only just very recently risen to 1.22. I guess if you count the very short time of parity (less than a couple of days iirc) then the 10% figure is right but it doesn't convey what really happened. The Swiss Franc was seen more as a haven to minimise loss
than as a way to make profit.

Anyway I'm going off topic.

dlouth15

Nody wrote: »

The euroministers? It was their own damn government who wanted the 6.75% levy on below 100k so that they would not need to hit the Russian money to hard. The "euroministers" simply told them that they had to cough up X Billion and how they got that was their choice (i.e. they could have raised it by selling state property or mining rights or what ever but the Cyprus government decided to go after the deposits instead).

Please read gurramok's post to which I was responding. My recollection is that hitting the under 100k deposits was the solution that was agreed by the ministers including the Cypriot minister. It was welcomed, iirc, by the Irish government at the time. It was only when the solution was rejected unanimously by the Cypriot parliament that a new solution was proposed and agreed upon. The impression was given in the post that I was responding to that the ministers came to some sort realization when in fact the solution that they agreed simply could not be implemented due to a decision made in Cyprus. By euroministers I mean eurozone finance ministers by the way.

antoobrien

BKtje wrote: »

Euro rose 10% verses the Swiss franc? That's news to me!
The euro dropped continually vs the franc from 1 euro = 150 ish chf down to momentary parity before the Swiss national bank applied a floor at 1.20 over two years ago. It has only just very recently risen to 1.22. I guess if you count the very short time of parity (less than a couple of days iirc) then the 10% figure is right but it doesn't convey what really happened. The Swiss Franc was seen more as a haven to minimise loss
than as a way to make profit.

The floor was imposed in September 2011, at least 5 weeks after the lowest exchange rates (July 25th €1=1.03), the rate has been bouncing within +/- 5c of 1.20 since August 2011 (with a few spikes ether way). €100 invested in CHF at the lows is now worth €84. If you got in at the front (in late 2008 it was 1.62) it'd be worth a 30% gain, well and good. On the other hand if you're like Gurdiev & Ganely, who started pimping their get out of the euro scheme in mid 2011, you'll more than likely be holding more losses than if you had stayed Eurozone or bought into the S&P. Those are the risks we take when we invest/gamble (depending on your viewpoint) money.

justmehere

So to summarise:

1) Deposits are "guaranteed" up to €100k per institution if a bank needs a bail-out (but as #2 below shows, that may give you a false feeling of security...)

2) There is absolutely nothing stopping Noonan slapping a 10% tax on deposits of any amount in the budget.
So he hasn't broken the rules of the guarantee scheme, but to the depositor that's cold comfort when 10% of their savings disappear into Enda's pay packet.

Farmer Pudsey

justmehere wrote: »

So to summarise:

1) Deposits are "guaranteed" up to €100k per institution if a bank needs a bail-out (but as #2 below shows, that may give you a false feeling of security...)

2) There is absolutely nothing stopping Noonan slapping a 10% tax on deposits of any amount in the budget.
So he hasn't broken the rules of the guarantee scheme, but to the depositor that's cold comfort when 10% of their savings disappear into Enda's pay packet.

The thing is he will only do it once as all money will flood out of the country, Banks will instantly go bust as they cannot give everybody there money. This will trigger the 100K guarantee which the government cannot pay as they are bust.

There is nothing stopping Noonan from cutting Social welfare by 20% but again he will not do it neither will he cut PS pay by another 10% .

Will someone come up with a better Chicken Licken story about the sky going to fall in. This one is a school boy economics theory

At the moment he is getting about 0.6% of a capital tax every year on savings using DIRT and the introduction of PRSI on deposit interest will increase this.

gaius c

srsly78 wrote: »

Nope it was the Cypriots that wanted to hit the small savers initially. The ECB just told them to cough up X amount, how they gathered the X amount was left to themselves. Much easier to blame ze germans tho.

One important difference between us and the Cypriots is that their bondholders were relatively small compared to their deposit mountain so they really had no choice to burn the depositers to some extent. Of course, the ECB insisted that they didn't touch bondholders at all, which is a different story...

On the other hand, Irish banks didn't have sufficient deposits so they had to seek money elsewhere, hence the funding via bondholders.

At this stage, I think it's a given that deposits are going to be garnished one way or another. The arrears crisis finally sinking our banks will see to that. There could well be bloodshed when folk see that debt write-off is being funded directly out of their bank accounts.

antoobrien

gaius c wrote: »

One important difference between us and the Cypriots is that their bondholders were relatively small compared to their deposit mountain so they really had no choice to burn the depositers to some extent. Of course, the ECB insisted that they didn't touch bondholders at all, which is a different story...

Not true at all, that was Cyprus themselves. The final deal included bondholders, but the fact is that the amounts were so small as to be insignificant compared to the total amount, so depositors had to be hit.

gaius c wrote: »

At this stage, I think it's a given that deposits are going to be garnished one way or another. The arrears crisis finally sinking our banks will see to that.

If there were an ounce of truth in that the banks would not be reducing their posted losses. It seems that some people want the banks to fail so that they can be seen to be right.

Joe 90

Farmer Pudsey wrote: »

The thing is he will only do it once as all money will flood out of the country, Banks will instantly go bust as they cannot give everybody there money. This will trigger the 100K guarantee which the government cannot pay as they are bust.

There is nothing stopping Noonan from cutting Social welfare by 20% but again he will not do it neither will he cut PS pay by another 10% .

Will someone come up with a better Chicken Licken story about the sky going to fall in. This one is a school boy economics theory

At the moment he is getting about 0.6% of a capital tax every year on savings using DIRT and the introduction of PRSI on deposit interest will increase this.

In fact Noonan, along with most other politicians, not just in Ireland, already has a capital tax giving a lot more than .6%. It is called inflation and has been sold as a good thing to a lot of the populace.

realitykeeper

OU812 wrote: »

http://www.irishtimes.com/business/sectors/financial-services/bank-deposits-of-over-100-000-may-be-at-risk-1.1384295

Saw this over on reddit. I think they'd go for a figure lower than 100k

There is a hierarchy of suckers. In the case of a bank failing, I think the depositors would be the first to be hit - ironic given that it is the borrowers who are to blame. Maybe it is time to move money out of the Irish banks, at least until the mortgage arrears issue is sorted out. If the tax payer is forced to pick up the tab, it might be a good idea for anyone with savings to keeps their money abroad permanently. The government would only try to take it to pay for other peoples debts.