Monday, March 18, 2013

Cyprus Savers to Pay for Banks' Mistakes

When Cyprus's banks reopen on Tuesday morning, every depositor will have some of his or her money levied. Deposits accounts under 100,000 euros will have 6.75% of the funds levied. Accounts over 100,000 euros will have 9.9% levied. Only then will the Eurozone's emergency lending facility and the IMF inject 10 billion euros into the banks to allow them to keep operating.

Their justification? To prevent immediate bankruptcy and closure of the major banks.   Just imagine this happens to your own bank account.  If you have $10000 in your account, after this Tuesday morning, $675 is automatically gone.  If you have $100000 of your hard earn savings? $6750 will be deducted on Tuesday morning by the government so that they can secure more loans from IMF and EU to bailout the banks.

Why do the savers need to pay for the mistakes made by the banks? Why shouldn't the banks' stakeholders bare the risk? Well, because they are too big to fail. Bankruptcy has become a taboo these days. This has never happen before. How is this going to turn out? Definitely not good. This is day like robbery on the common folks.

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