Paphos Life

Poppy wrote: ↑Tue Aug 15, 2017 12:07 pm No they didn't Trev but we all knew did we not as we all know now what the limits are. I believe it is £75k now here in the UK but no longer sure what it is in Cyprus and euros.

jeba wrote: ↑Tue Aug 15, 2017 8:26 am
No, it wasn´t that much different. As I said, I had borrowed my money (not invested in equity) to a company which went belly up just as depositors in Cypriot banks had done. Basically the same scenario with the only exception that depositors in a bank enjoy some insurance cover. Which protected the first €100k, so they should count their lucky stars that they got those 100k back plus most of what was above that amount. I was just less lucky.

jeba wrote: ↑Tue Aug 15, 2017 8:26 am Blaming the EU for the losses is like reinventing the stab-in-the-back legend.

Happy in Cyprus wrote: ↑Thu Aug 17, 2017 2:10 am

trevnhil wrote: ↑Tue Aug 15, 2017 11:39 amNobody sent us a letter saying if you are in Laiki bank or Bank of Cyprus we will be raiding your saving over 100,000

trevnhil wrote: ↑Tue Aug 15, 2017 6:44 pmSadly no, obviously some people didn't know.. Those who had money stolen!!

Surely if €100k per person is the guarantee limit throughout the EU, then it stands to reason that anything over and above €100k is unprotected and in jeopardy? It is then up to the individual to spread his/her savings per person, per bank, in such a way that he/she achieves maximum protection. No good complaining if you knew the protection limit was €100k and you then leave €300k in your bank account. Of course you're going to be vulnerable. Same applies as much today as then.

We had one Russian customer who lost €12 million to the haircut and many others who lost all their life savings; in some cases amounting to many hundreds of thousands of Euros. I've heard so many tragic stories. But I can only repeat that there was much discussion at the time on the ex-pat forums as to two named banks being extremely flaky.

Happy in Cyprus wrote: ↑Thu Aug 17, 2017 2:10 am
Surely if €100k per person is the guarantee limit throughout the EU, then it stands to reason that anything over and above €100k is unprotected and in jeopardy? It is then up to the individual to spread his/her savings per person, per bank, in such a way that he/she achieves maximum protection. No good complaining if you knew the protection limit was €100k and you then leave €300k in your bank account. Of course you're going to be vulnerable. Same applies as much today as then.

Royal wrote: ↑Tue Aug 15, 2017 8:24 pm

jeba wrote: ↑Tue Aug 15, 2017 8:26 am
No, it wasn´t that much different. As I said, I had borrowed my money (not invested in equity) to a company which went belly up just as depositors in Cypriot banks had done. Basically the same scenario with the only exception that depositors in a bank enjoy some insurance cover. Which protected the first €100k, so they should count their lucky stars that they got those 100k back plus most of what was above that amount. I was just less lucky.

Jeba

I fully understand that bonds are not equities and that by buying bonds you are effectively lending money to a government/company/institution for a fixed rate of interest - which will normally exceed the rates available than keeping money on deposit in a bank (why else would anyone buy bonds rather than keep money in a bank?). Of course, as has been suggested in other posts, the higher the rate of interest, the greater the risk. You bought bonds in a commercial company which went bust and you received a pittance on your investment, but you received something.

Now in the case of Bank of Cyprus and Laiki Bank, the situation was totally different. If, either bank had actually gone bust, then the situation would have been more similar to what happened to you in that uninsured deposits would be lost, and after paying secured creditors, bond holders and then shareholders (in that order) would possibly be given a fraction of their investments back. That's why you received something - albeit a paltry amount.

But, unlike your example of Schefenacker, that didn't happen in the case of Bank of Cyprus or Laiki Bank did it? Neither bank ‘officially’ was made bankrupt and made to follow the rather over-simplified procedure I outlined above. As far as I am aware, the Troika unofficially, but officiously, assumed the role of Official Receiver.

Instead, as I understand it, the BoC has carried on trading and was effectively ‘given’ the good assets of Laiki Bank, but somehow, all of their depositors all lost any money held in excess of €100k. Now whilst some depositors enjoyed 4.5% interest on fixed term deposits, which some may claim to be taking a risk, other depositors (e.g. current accounts had little or no interest but were treated the same as the risk takers). Now, whilst I am a simple sort of chap, I simply cannot understand how all of this is considered to be somehow acceptable. The bank didn't collapse, it was given assets it didn't have to pay for, and it effectively ‘wrote off’ deposits over €100k. Theft? Yes - I think so.

Laiki Bank still exists as a ‘bad bank’ holding all the NPLs and liabilities, but once again, the proper procedure wasn't followed. Surely, the assets should have been sold to the highest bidder anywhere in the world (remember that Barclays bought the investment side of Lehman Brothers when it collapsed).

jeba wrote: ↑Tue Aug 15, 2017 8:26 am Blaming the EU for the losses is like reinventing the stab-in-the-back legend.

The Troika created this procedure which is supposed to make it ‘legitimate’ but flies in the face of all logic and current practice. It was an experiment.

Now to those that think that Cyprus could have said ‘No’ to this experiment - there are countless articles online from the Economist to the New York Times which have described what the Troika did as bullying of the worst kind. They effectively said to the Cyprus government - do this or we will destroy you financially and eject you from the Eurozone.

I can only conclude that the sooner we (the UK) have left this ‘union’ of ‘partners’, the better.

kingfisher wrote: ↑Fri Sep 08, 2017 8:47 pm On further consideration….
Two billion euros a day of created money is more effectively expressed as 20,000 euros PER SECOND! Which coincidentally is around the price of a new Merc here in Cyprus. So maybe it’s better for Germany to overcome any reservations about ECB Q.E. and view it as a convenient way of ensuring an endless supply of buyers in southern European states who may possibly never repay the loans!