Laws That Allow The Government to Seize Savings Deposits

Laws That Allow The Government to Seize Savings Deposits

Author
Discussion

fishseller

Original Poster:

359 posts

95 months

Wednesday 28th June 2017
quotequote all
When a Cyprus bank went bust in 2013, the Government SEIZED 40% of ALL SAVINGS DEPOSITS OVER €100,000.
Could this happen here?


Ziplobb

1,363 posts

285 months

Wednesday 28th June 2017
quotequote all
Yes
It happened in Greece a few years back anything over 90,000 EUR IIRC

superkartracer

8,959 posts

223 months

Wednesday 28th June 2017
quotequote all
They could do what they like under the right situations , look at the last war.

Cheib

23,288 posts

176 months

Wednesday 28th June 2017
quotequote all
Analysts hours/days/weeks trying to forecast what will happen to the financial system when banking institutions get into trouble....almost without fail they have failed to predict what action Central Banks/Govts/Regulators will take to shore up the financial system. Generally they will reinvent the rules to mitigate contagion...but as happened in Cyprus or with the Exchange Controls in Greece sometimes these things will impact the individual.

In the past Institutional Investors (e.g. Pension Funds or Insurance Companies) that have bought the debt of banks i.e. put money on deposit/lent the banks money have been considered pari passu with retail depositors. This protected the institutional investors as to force them to take losses meant legally Mr and Mrs Smith would also have had to take them....the rules/structure have changed so it is now possible to "bail in" the Institutions without impacting depositors.

TooLateForAName

4,757 posts

185 months

Wednesday 28th June 2017
quotequote all
I think that you're misrepresenting or misunderstanding what happens to be honest.

If a bank goes bust then the reality is that they (the bank) have already given your money to someone else or otherwise lost it. They dont actually keep your cash in a special vault.

What happens is that the government generously recompenses you up to the limit of the financial compensation scheme.

fishseller

Original Poster:

359 posts

95 months

Wednesday 28th June 2017
quotequote all
Ziplobb said:
Yes
It happened in Greece a few years back anything over 90,000 EUR IIRC
should we all be worried with the amount of debt the banks look exposed and with the asset bubble ?
How would someone with a bit cash safe guard it ?

robinessex

11,073 posts

182 months

Wednesday 28th June 2017
quotequote all
fishseller said:
Ziplobb said:
Yes
It happened in Greece a few years back anything over 90,000 EUR IIRC
should we all be worried with the amount of debt the banks look exposed and with the asset bubble ?
How would someone with a bit cash safe guard it ?
Don't have cash. Invest it. In something physical. Land, property, gold, diamonds, whatever. Not that they are actually 'valuable', it's all what people think is valueable. Actually, what is money? A notational value on a piece of paper (paper money), or object (coin), used to be called cash!!

Edited by robinessex on Wednesday 28th June 09:18

TooMany2cvs

29,008 posts

127 months

Wednesday 28th June 2017
quotequote all
fishseller said:
should we all be worried with the amount of debt the banks look exposed and with the asset bubble ?
Carney thinks so.

http://www.bbc.co.uk/news/business-40416976

fishseller said:
How would someone with a bit cash safe guard it ?
Well, if you don't trust the banking system... <points to mattress>

TooLateForAName

4,757 posts

185 months

Wednesday 28th June 2017
quotequote all
fishseller said:
should we all be worried with the amount of debt the banks look exposed and with the asset bubble ?
How would someone with a bit cash safe guard it ?
spread it around so that you have less than the compensation limit in each institution.

TooMany2cvs

29,008 posts

127 months

Wednesday 28th June 2017
quotequote all
fishseller said:
When a Cyprus bank went bust in 2013, the Government SEIZED 40% of ALL SAVINGS DEPOSITS OVER €100,000.
Could this happen here?
Could it? Yes.

Is it even remotely likely? No.

What actually happened in Cyprus...? Well, it was a lot more complicated than you make out... Not least because a large swathe of the deposits affected were dodgy Russian money being basically laundered through a tax haven.
https://en.wikipedia.org/wiki/2012%E2%80%9313_Cypr...

The only other time it's happened in a modern economy was in Italy in 1992, and that was only 0.6%.

Cheib

23,288 posts

176 months

Wednesday 28th June 2017
quotequote all
TooLateForAName said:
I think that you're misrepresenting or misunderstanding what happens to be honest.

If a bank goes bust then the reality is that they (the bank) have already given your money to someone else or otherwise lost it. They dont actually keep your cash in a special vault.

What happens is that the government generously recompenses you up to the limit of the financial compensation scheme.
Are you referring to my post ?

bloomen

6,934 posts

160 months

Wednesday 28th June 2017
quotequote all
Your 'money in the bank' has never been your money. It's an IOU from them to you the moment it's deposited.

That being the case it's subject to the whims of the law or their own terms and conditions.

TooLateForAName

4,757 posts

185 months

Wednesday 28th June 2017
quotequote all
Cheib said:
Are you referring to my post ?
Nope. The OP.
You posted while I was typing.

James_B

12,642 posts

258 months

Wednesday 28th June 2017
quotequote all
I've already got half an eye on the possible outcomes in this respect if Corbyn ever becomes Prime Minister. It'd be disastrous for the country, but would play brilliantly with a lot of his supporters. He said there'd be a "day of reckoning" for bankers if he got in, and I'd assume a 20% haircut on savings would be at the mild end of whatever he meant by that.

I held off from funding my pension as heavily as I could in years past because I was aware that having it sit in the state's headlights for thirty years after getting "generous" tax relief might just make it too tempting to a future socialist government, too.

I lost out there, of course, as I am now only allowed to fund £10k a year, spdespite being willing to put an entire year's salary into the pot.

Is it likely? No, not at all, but it's always worth bearing in mind the low probability but debilitating outcomes when deciding where to put your investments. It's one reason I have a decent chunk in gold. As well as it being a nice thing to have as a paperweight, it also is completely invisible to the state, and quite easy to take overseas.

fishseller

Original Poster:

359 posts

95 months

Wednesday 28th June 2017
quotequote all
James_B said:
I've already got half an eye on the possible outcomes in this respect if Corbyn ever becomes Prime Minister. It'd be disastrous for the country, but would play brilliantly with a lot of his supporters. He said there'd be a "day of reckoning" for bankers if he got in, and I'd assume a 20% haircut on savings would be at the mild end of whatever he meant by that.

I held off from funding my pension as heavily as I could in years past because I was aware that having it sit in the state's headlights for thirty years after getting "generous" tax relief might just make it too tempting to a future socialist government, too.

I lost out there, of course, as I am now only allowed to fund £10k a year, spdespite being willing to put an entire year's salary into the pot.

Is it likely? No, not at all, but it's always worth bearing in mind the low probability but debilitating outcomes when deciding where to put your investments. It's one reason I have a decent chunk in gold. As well as it being a nice thing to have as a paperweight, it also is completely invisible to the state, and quite easy to take overseas.
the problem with lumps of gold is possible theft

James_B

12,642 posts

258 months

Wednesday 28th June 2017
quotequote all
Yes, it's a definite issue, so I'd norpt want life-changing amounts in it. It also pays no dividends or coupons, and has little intrinsic value.

Contrary to what some think, too, it'd be sod-all use if society collapsed. At that point you want tins of bans, guns, and a house a long way from everyone else.

markcoznottz

7,155 posts

225 months

Wednesday 28th June 2017
quotequote all
TooLateForAName said:
fishseller said:
should we all be worried with the amount of debt the banks look exposed and with the asset bubble ?
How would someone with a bit cash safe guard it ?
spread it around so that you have less than the compensation limit in each institution.
Yep it's per banking licence. All academic anyway imho, Cyprus is the smallest kid in the playground, unlikely a g8 would suffer similar.

robinessex

11,073 posts

182 months

Thursday 29th June 2017
quotequote all
fishseller said:
James_B said:
I've already got half an eye on the possible outcomes in this respect if Corbyn ever becomes Prime Minister. It'd be disastrous for the country, but would play brilliantly with a lot of his supporters. He said there'd be a "day of reckoning" for bankers if he got in, and I'd assume a 20% haircut on savings would be at the mild end of whatever he meant by that.

I held off from funding my pension as heavily as I could in years past because I was aware that having it sit in the state's headlights for thirty years after getting "generous" tax relief might just make it too tempting to a future socialist government, too.

I lost out there, of course, as I am now only allowed to fund £10k a year, spdespite being willing to put an entire year's salary into the pot.

Is it likely? No, not at all, but it's always worth bearing in mind the low probability but debilitating outcomes when deciding where to put your investments. It's one reason I have a decent chunk in gold. As well as it being a nice thing to have as a paperweight, it also is completely invisible to the state, and quite easy to take overseas.
the problem with lumps of gold is possible theft
Are you serious ?

fishseller

Original Poster:

359 posts

95 months

Thursday 29th June 2017
quotequote all
robinessex said:
fishseller said:
James_B said:
I've already got half an eye on the possible outcomes in this respect if Corbyn ever becomes Prime Minister. It'd be disastrous for the country, but would play brilliantly with a lot of his supporters. He said there'd be a "day of reckoning" for bankers if he got in, and I'd assume a 20% haircut on savings would be at the mild end of whatever he meant by that.

I held off from funding my pension as heavily as I could in years past because I was aware that having it sit in the state's headlights for thirty years after getting "generous" tax relief might just make it too tempting to a future socialist government, too.

I lost out there, of course, as I am now only allowed to fund £10k a year, spdespite being willing to put an entire year's salary into the pot.

Is it likely? No, not at all, but it's always worth bearing in mind the low probability but debilitating outcomes when deciding where to put your investments. It's one reason I have a decent chunk in gold. As well as it being a nice thing to have as a paperweight, it also is completely invisible to the state, and quite easy to take overseas.
the problem with lumps of gold is possible theft
Are you serious ?
Yes

robinessex

11,073 posts

182 months

Thursday 29th June 2017
quotequote all
fishseller said:
robinessex said:
fishseller said:
James_B said:
I've already got half an eye on the possible outcomes in this respect if Corbyn ever becomes Prime Minister. It'd be disastrous for the country, but would play brilliantly with a lot of his supporters. He said there'd be a "day of reckoning" for bankers if he got in, and I'd assume a 20% haircut on savings would be at the mild end of whatever he meant by that.

I held off from funding my pension as heavily as I could in years past because I was aware that having it sit in the state's headlights for thirty years after getting "generous" tax relief might just make it too tempting to a future socialist government, too.

I lost out there, of course, as I am now only allowed to fund £10k a year, spdespite being willing to put an entire year's salary into the pot.

Is it likely? No, not at all, but it's always worth bearing in mind the low probability but debilitating outcomes when deciding where to put your investments. It's one reason I have a decent chunk in gold. As well as it being a nice thing to have as a paperweight, it also is completely invisible to the state, and quite easy to take overseas.
the problem with lumps of gold is possible theft
Are you serious ?
Yes
Where would/do you keep it? On the Coffee table ?