The Great EU Bank Robbery
We Are All Cypriot Savers
Strange that the IMF is calling this a 'bank -tax', this is quite the misnomer. A bank tax would be payed by banks out of their profits, a profit garnish so to speak. Something like that would be much more appropriate here.
This is not a 'bank tax', but a confiscation of private funds. The powers that be like to hide their blatant theft with many words, catch phrases to be repeated by the media in an attempt to throw off the general public.
Since a large portion of the general public pays no attention to the news they are likely to hear the words 'bank tax' in passing on the radio and think, "wow they are finally making the banks pay!", when in fact nothing could be further from the truth.
The question also needs to be asked; who is actually owed money? Cyrpus as a country is in the hole for 7 Billion Euros, so who actually holds the bonds and is demanding to be paid? This question has not been addressed in any of the articles I have read. There is no doubt in my mind however that the answer is that other international banks hold the bonds.
The article indicates that the problem originated with the Cypriot banks;
"According to credit rating reports, Cyprus arrived at this fiscal crisis
initially because its banks carried a lot of Greek debt as approved by
international bank rules."
So the problem started with Cypriot banks doing business in accordance with international banking rules. These banks ruined themselves by taking on bad debt, destroyed the Cypriot economy but now expect private citizens to pick up the pieces. In the meantime the IMF thinks this is fair and that it "appropriately allocates the burden sharing." Wow.
I also find it interesting that based on a typical fractional reserve banking system banks typically only hold about ~10% of their total liabilities in cash. Therefore what the banks could be doing in effect is confiscating all the real currency and leaving the public with zeroes on a computer screen. See what happens when you try to withdraw that!
What may happen through this though bailout is that the banks are actually shooting themselves in the foot. As the Daily Mail article stated;
"Sebastien Galy, of the bank SocGen,
agreed the move could be the ‘trigger’ for a new eurozone crisis: ‘It
breaks a cardinal rule – namely, public trust on which money relies.'"