Financial Times: Greek banks prepare plan to raid deposits to avert collapse
Greek banks are preparing contingency plans for a possible “bail-in” of depositors amid fears the country is heading for financial collapse, bankers and businesspeople with knowledge of the measures said on Friday.
The plans, which call for a “haircut” of at least 30 per cent on deposits above €8,000, sketch out an increasingly likely scenario for at least one bank, the sources said.
A Greek bail-in could resemble the rescue plan agreed by Cyprus in 2013, when customers’ funds were seized to shore up the banks, with a haircut imposed on uninsured deposits over €100,000.
WNU Editor: For someone in Greece who has worked hard, sacrificed, played by the rules, and saved his/her money .... and now facing a seizure of anywhere from 30% to 50% of their savings .... this must put them over the edge. The outcome from such a seizure of depositor money may solve the problems in the short term, but for the long term this will all but guarantee no trust or confidence in the Greek banking system for generations.
I have been asked by a few readers on what is my take for tomorrow's Greek referendum. Sighhh .... I have been thinking about it, and it has not been easy. Personally .... I do not like debt, but I do understand the importance of sometimes going into debt .... getting a mortgage, business loan, an emergency .... debt is very good if it is handled properly and within one's means. In the Greek situation .... debt has been used by politicians and by the voters who vote for them as a means to keep themselves in power, and to keep their voting block happy .... but in the end everyone has (and is) living beyond their means. As a result .... Greece is now faced with a terrible choice. If they vote to stay in the EU .... hard times and austerity are going to last for a decade or two (think Argentina .... but worse). If they decide to get out of the EU and bust all of their debt commitments .... life is going to be pure and utter hell for at least 5 years .... but after that things will improve (maybe). For others the choice is even more simpler than that .... be a part of the EU or be a part of North Africa .... and will vote on that bases. As I said .... this is not going to be an easy vote. My guess is that the Greek voter does not want to pay-off this huge debt .... they want to see it gone, and hope that someone else will pick up the bill .... and will vote accordingly. But the question that still needs to be answered is .... will the Greeks be willing to accept 5 years of economic hell? If they have courage .... they will embrace that .... but a part of me wonders .... are they that afraid, and will they back down when they walk into the voting booth. Fear is usually what dictates elections in times of crisis .... and for many Greeks .... they are living in a time of fear.
As to how would I vote .... I know how to survive and prosper in tough times so I will vote no .... but if I was Greek I would also be cursing my fellow countrymen for being this stupid to put Greece in the situation that it is in today.
The EU version of the FDIC has some differences from the US version. That will be remedied in the US in the coming years.
ReplyDeleteI concur with you war news, I would do the same but for other but simular reasons. But the best would have been to avoid this situration from the start.
ReplyDeleteGermany and the EU member can take the hit. It would hurt. it would make them madder than Hell, but they could take it.
ReplyDeleteThey should declare a jubilee and forgive all the debt and then walk away and wash their hands of Greece. They can Grexit Greece out of the Euro.
The structural problems of vote buying citizen fraud and government corrruption would remain. meaning they be in debt again with the year. But maybe it is the way to kill the beast and finally vote the bastards out.