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Gender: Female
Hometown: Washington state, for half my life
Home country: USA
Current location: SW Alabama. for the rest of my life
Member since: Wed Feb 27, 2008, 02:09 PM
Number of posts: 59,688

About Me

Long time political activist, working to tint my lil "Mayberry" more blue. Collector of strays of various species and minds.

Journal Archives

Cypriot Politicians’ Loans Written Off

With banks confiscating up to 80 percent of uninsured deposits over 100,000 euros ($130,000) and the country facing a deep economic crisis, Cyprus has forgiven loans to politicians and companies while others are generally being required to pay in full, media reports said, setting off fury on the island country.

The Greek newspaper Ethnos and the website 24h.com.cy said that loans to Members of Parliament from the three major political parties and other officials in the public administration from the Bank of Cyprus and Cyprus Popular Bank (Laiki) will be written down or off.

The list includes former and current politicians, wives and relatives whose debt will be excused while the banks chase others to pay their loans. It was not said whether the government or bank officials drew up the list of those who will be given preferential treatment and who won’t have to pay, essentially having received free money they can keep or spend as they wish.


for some reason, folks on Cyprus are bit ticked off over this....

Decided: 37.5 percent haircut for uninsured depositors at Bank of Cyprus

Laiki customers with savings of more than 100,000 euros, which are not guarenteed, will lose even more money than Bank of Cyprus customers.

The Central Bank of Cyprus has prepared a decree, leaked to the media on Friday night, that foresees a 37.5 percent haircut for uninsured depositors at Bank of Cyprus and which paves the way for the resolution of Cyprus Popular Bank (Laiki) to begin.

Deposits under 100,000 euros at Laiki are to be put in a “good bank” that will be merged with Bank of Cyprus, the island’s largest lender, as part of the overhaul of the financial sector that President Nicos Anastasiades agreed to in order to clinch a deal with the eurozone and the International Monetary Fund for a 10-billion-euro bailout.

Laiki customers with savings of more than 100,000 euros, which are not guaranteed by the Cypriot state,
face even greater losses than uninsured Bank of Cyprus customers who will receive equity as part of the haircut. The Central Bank of Cyprus also said on Friday that capital controls on the island would be extended for another five days.


They are doing this despite a letter from the Governor's office that it is illegal.

see here for info on the letter:

Capital controls stifle small business on Cyprus

"...the services sector comprises about 80 percent of the economy. At the heart of it lies banking."

Stories of how small businesses cannot pay suppliers because of banking limits..they have the money, but cannot
send it to suppliers because of bank controls.


Now Canada draws up plans for a Cyprus-like "bail in"

That is what they are calling it now..a bank "bail-in" where any bank failure is to be rescued by depositors,
and not by "taxpayers", they say it as if that is a better thing.
New Zealand is also contemplating a "bail in".

to wit:

"Now Canada intends to put the same system in place. Buried on page 144 and 145 of their latest budget document is the following ditty:

The Government proposes to implement a ―bail-in regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital. This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail-in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants.

Systemically important banks will continue to be subject to existing risk management requirements, including enhanced supervision and recovery and resolution plans.

But note that there is no recompense when that "enhanced supervision" fails.
When you deposit funds into a bank the cash the bank now has is an asset. The deposit is a liability."


The Canadian Budget Document referred to can be found here:

The document is similar in scope and intent to the joint paper by the U.S. Federal Deposit Insurance Corporation and the Bank of England dated Dec. 10, 2012

Which I posted about yesterday

So, Cyprus has done it, New Zealand and Spain are actively talking about it, Canada has the procedure in its current financial paper, and England and USA jointly have written essentially the same directive.

It Can Happen Here: The Confiscation Scheme Planned For U.S. And U.K. Depositors


A joint paper by the U.S. Federal Deposit Insurance Corporation and the Bank of England dated Dec. 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier here); and that the result will be to deliver clear title to the banks of depositor funds.

New Zealand has a similar directive....

Although few depositors realize it, legally the bank owns the depositor's funds as soon as they are put in the bank. Our money becomes the bank's, and we become unsecured creditors holding IOUs or promises to pay . But until now the bank has been obligated to pay the money back on demand in the form of cash.
Under the FDIC-BOE plan, our IOUs will be converted into "bank equity." The bank will get the money and we will get stock in the bank.
With any luck we may be able to sell the stock to someone else, but when and at what price?

No exception is indicated for "insured deposits" in the U.S., meaning those under $250,000, the deposits we thought were protected by FDIC insurance. This can hardly be an oversight, since it is the FDIC that is issuing the directive.


New rules announced for Cyprus bank depositors.......gulp.

1. Ban on checks being cashed, although they can be deposited into accounts.

2. The transfer of money abroad is not allowed unless it is to pay for imports that carry necessary documentation and for accommodation and tuition costs for Cypriots studying abroad.
They must be full-time residents on the island.
The limit for students abroad is 10,000 per quarter.

Spending on credit cards abroad is limited to 5,000 euros per month per person.

3. Time deposit accounts cannot be redeemed before maturity.

4. Those leaving the country will not be allowed to carry more than 3,000 euros in cash on them per trip.
This also applies to other countries.

5. Any transactions, transfers or payments that have not been completed before the decree is issued are subject to capital controls.

6. The capital controls apply to all accounts, payments and transfers, regardless of currency used.


Might be a good thing to be aware of what capital controls look like, in case they come to a bank near you.

It just never stops...Regulators Find British Banks Must Raise $38 Billion

Gee..I wonder where they will get the money????

British banks must raise a combined £25 billion, or $38 billion, in new capital by the end of the year to protect against future financial shocks, according to a report from local authorities on Wednesday.

The Bank of England, which takes over the direct supervision of British firms like HSBC and Barclays next week, said the new reserves were needed to protect against losses connected to risky loan portfolios, future regulatory fines and the readjustment of banks’ bloated balance sheets.

The reported released on Wednesday said that local banks had overstated their capital reserves by a combined £50 billion, which authorities said would now be adjusted on the firm’s balance sheets. Many of the country’s banks already have enough money to handle the accounting adjustment, the report said on Wednesday.

"overstated"..a nice word for lying.
so is "account adjustment"
What they really mean is, new rules say banks have to have enough cash to back their gambling costs.

Laiki bank is OPEN to Britain's customers, but closed in Cyprus.

Looks like only Cyprus bank customers got screwed.

UK Laiki Bank customers told 'it is business as usual'

Laiki Bank customers in the UK face no restrictions on access to their cash and have been told it is "business as usual" at the firm's four British branches, despite an overnight decision to close its Cyprus parent.

Under a bailout plan agreed in the early hours of the morning, Laiki Bank will be wound up and its €4.2bn in deposits of more than €100,000 will be placed in a "bad bank", meaning they could be wiped out entirely.

Cypriot savers with smaller deposits at Laiki will see their accounts transferred to the Bank of Cyprus;
however, in the UK the two banks will remain separate.


Four years after Obama promised to close Guantanamo Bay, $195.7 million renovation in works

in renovations and new construction

Pentagon request includes $49 million for new jail for 'special' detainees

White House shut office charged with closing controversial US prison

Crumbling structures make it a 'money pit,' says former military prosecutor

President Barack Obama famously promised in early 2009 to close the US military's detention facility at Guantanamo Bay, Cuba within 12 months. But new Defense Secretary Chuck Hagel is instead considering a proposal from his top commanders to spend $195.7 million renovating it and erecting a new prison building.
The new construction would include $49 to house high-value targets like Khalid Sheikh Mohammed, the mastermind behind the 9/11 terror attacks, whose initial detention and interrogation was handled by the Central Intelligence Agency.

The New York Times reported that it would likely replace Camp 7, the oft-rumored but never acknowledged installation for those 'special' detainees.

Cyprus deal reached....anyone know how the Russians will react to THIS?

Reuters reports..
The proposal, which will now be presented to euro zone finance ministers for discussion, will involve setting up a "good bank" and a "bad bank" and will mean that Popular Bank of Cyprus, known as Laiki, will effectively be shut down.

Deposits below 100,000 euros in Laiki will be transferred to Bank of Cyprus.
Deposits above 100,000 euros, which under EU law are not insured, will be frozen and will be used to resolve debt.
It remains unclear how large the writedown on those funds will be.

The EU spokesman said there would be no "levy" imposed on any Cypriot banks, with the package requiring a full "bail-in" of uninsured depositors, which is likely to mean heavy losses for those with large holdings in Laiki and potentially Bank of Cyprus, where many Russians hold bank accounts.
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