Accounts over €100k are not just the fat Russian a/cs : they're also a lot of Cyprus business a/cs, routine €100k bonds 1 year bonds, client accounts held by lawyers etc, and last but not least some of Cyprus's own pension fund a/cs one of which was reported to €700 million.

Near-future and long-term investment in Cypress is surely to suffer as a result of this solution.

This is a depression in the making.

For one thing, there is an immediate crimp in economic activity in Cyprus. Consider a grocery store. The gross margin on sales is not that much, and from the gross margin the store pays salaries, utilities, etc. But there is a huge roll in cash, most of which comes in and goes right back out for more groceries. Nor can they pay their taxes!

Now the stores that have effectively lost ALL access to their funds above 100KEuro can neither restock nor pay their employees.

Can you imagine the havoc? The same is true for a host of other businesses.

And what are all other businesses thinking? The money will come right out of the banks and be kept in a safe, a lockbox, under the mattress....

If a bank fails, they close shop, take all the depositors money and the federal insurance makes whole those savers with accounts less than 100,000 euros.

I guess savers with over 100,000 euros get something instead of nothing. But do these banks ever expect to have big savers deposit in their banks ever again? As soon as restrictions are lifted, everyone, big savers and small, will be taking all their money out.

Why not just let the banks go into bankruptcy? It seems that way the results will be the same and there wont be a big debt hanging over the heads of the citizens of Cyprus.

IMO, they did go belly up,
but are still, thru means unknown, still
paying off smaller depositors.

(if they have bankruptcy laws, that is.
they seem to make the laws up as they go along)

He does the 'Economic Update' on NY Free Speech radio station WBAI. Here is a link to his show, from the Archives.

http://wbai.org/server-archive.html

This is a Big Thing, for global banking in general.

What a shame.

Either that or their one account for 1 million turned into 10 accounts for 100k (in 10 different names) overnight.

The people really being stung are the Cypriot businesses, pensions, etc.

Payroll and working capital just went up in smoke.

They left the foreign branches and affiliates open while the banks in Cyprus were closed, and foreigners were pulling their money out. Plus, there was warning.

It's the businesses in Cyprus who were left high and dry.

The whole thing about money laundering is just a facade, IMO (I have a long history in banking). If you suspect money laundering, you go after those people. You freeze their accounts. You don't grab the bank accounts of the honest businesses that had nothing to do with it.

So anybody with over €100,000 in the bank is now a fat cat?