Cyprus to bring in weekly cash curbs

[dipsydoodle]

Source: BBC News

Cyprus finance ministers are planning to impose a weekly limit on cash withdrawals, the BBC has learned.

The country's draft capital controls include export limits on euros and a ban on cashing cheques, says Newsnight economics editor Paul Mason.

In addition, fixed-term deposits will have to be held until maturity.

Cyprus's finance minister earlier confirmed that depositors with more than 100,000 euros could see 40% of their funds converted into bank shares.

Read more: http://www.bbc.co.uk/news/business-21936554

[Tuesday Afternoon]

1. DU Rec

[hughee99]

2. So the "fix" for their banking crisis is to force people to continue to use the banks,

and force people to invest in them?

[dipsydoodle]

3. Since when was anyone forced to use a bank

or invest in them ? Shares in lieu of the haircut are a differnt matter. They're temporary secuurity against funds withheld.

[hughee99]

4. People who have money in these banks will not be allowed to take out their money,

and people with sufficiently large accounts will have up to 40% converted to bank shares.

Isn't converting money in one's account to bank shares, "investing" in the bank?

[dipsydoodle]

5. Both are temporary measures

in the absense of which the two main banks wouldn't gone into receivership yesterday. If that had happened all deposit holders would've been far worse off.

[Nuclear Unicorn]

8. How long is temporary?

Supposedly, we had to endure the bank bailouts because when banks loan money what they're loaning other customers' deposits. If too many defaults went unsecured then those depositors lose their money. If too many depositors lose their money then they stop putting money in banks. If there is no money in banks than credit dries-up and the economy stagnates.

It almost sounded rational.

But now they're confiscating people's money and giving only IOUs worth less than the paper before and no definite time of repayment, no interest. Just theft. Now they're taking about it may become the MO in Spain, Italy and elsewhere. If I had money in any of these banks I'd be pulling it out at electronic speed.

And yet -- and yet -- this is exactly the scenario they said they were trying to prevent.

[dipsydoodle]

10. At present they are saying weeks.

By "we" I assume you mean US. This is Europe so maybe avoid comparisons.

[Nuclear Unicorn]

11. Call me skepitcal

If they're near bankruptcy it's a systemic issue. It's not some guy looking for his wallet which he was sure was in his suit just before the maid took it to the cleaners. The money they lack isn't weeks away from suddenly materializing. It has to grow back naturally or else it's worthless.

Again, we were told this was to prop-up consumer confidence in banks so as to preserve the credit markets. Who in their right mind feels confident in these yahoos?

[dipsydoodle]

13. They WERE near bankruptcy

The bailout will used to resolve that.

[Nuclear Unicorn]

14. I hope you're right

I just don't think there's a source of revenue due to be found anytime soon. I want you to be right for the sake of the people with money in the banks.

[dixiegrrrrl]

6. Depositors are forced, by these rules:

( taken from an earlier post)
http://www.democraticunderground.com/10022558471

* Restrictions in daily withdrawals
* Ban on premature termination of time savings deposits
* Compulsory renewal of all time savings deposits upon maturity
* Conversion of current accounts to time deposits
* Ban or restrictions on non cash transactions
* Restrictions on use of debit, credit or prepaid debit cards
* Ban or restriction on cashing in checks
* Restrictions on domestic interbank transfers or transfers within the same bank
* Restrictions on the interactions/transactions of the public with credit institutions
* Restrictions on movements of capital, payments, transfers
* Any other measure which the Finance Minister or the Governor of Cyprus Central Bank see necessary
for reasons of public order and safety

Notice how the checking accounts will be turned into timed accounts, like Certificates of Deposit,
EXCEPT, like the Hotel California, "you can never leave" the accounts which will have automatic rollover at the end of the time period.

So, yes, if you are depositor in the "good" bank, your money will be autmatically converted to a timed deposit
( much like out cds, here)
and
when the timed deposit matures, it will be automatically rolled over into another timed deposit.
Plus there will be limits on how much of your money you can withdraw, plus restrictions on credit card and debit card llimits.
Sound pretty capitive to me.

[Bosonic]

7. It's even difficult to remove yourself from Cyprus banks

Bank of Cyprus doesn't accept chairman's resignation

6.08pm GMT

Bank of Cyprus doesn't accept chairman's resignation

Breaking: Bank of Cyprus has refused to accept its chairman's resignation, and that of four directors who also tried to quit.

The bank is giving them a week to change their mind - but if they don't, they walk.

http://www.guardian.co.uk/business/2013/mar/26/eurozone-crisis-cyprus-banks

[Nuclear Unicorn]

9. He didn't do it right.

[Nye Bevan]

12. Bank of Mattress looks better and better (nt)

[Nuclear Unicorn]

15. If you have to keep you're money where you gonna get screwed keep it at home.

[quadrature]

16. Slovenia... next thru the meatgrinder

you have been warned