A coming recession?

[Warren Dew]

I would just note that removal of 10% of all bank deposits is not functionally much different from one year of 10% inflation.

[Coito ergo sum]

I would just note that removal of 10% of all bank deposits is not functionally much different from one year of 10% inflation.

Except, that if there were 10% inflation this year, then you'd be losing that, AND the 10% the government seized. However, usually when inflation is high, interest rates in bank accounts go up too, albeit never to fully compensate.

[MrJonno]

No one has taken 10% or anything.

Capitalist banks went bankrupt, capitalist investors lost 100% of their investment.

Commie socialists like the European Central Bank out of the kindness of its heart/to save the capitalist system gave investors 90% of their investment as a gift (with no strings to them personally)

Pretty sure during the great depression of the 1920's banks went bankrupt without any compensation whatsoever

[SteveB]

They weren't too big to fail though.

[pErvinalia]

I just heard this morning that part of the plan is that the 10% (or whatever it ends up being) will purchase equity in the bank. Not much of a purchase, given Cyprus is probably going to go down the toilet anyway, but at least something for their money.

[klr]

I just heard this morning that part of the plan is that the 10% (or whatever it ends up being) will purchase equity in the bank. Not much of a purchase, given Cyprus is probably going to go down the toilet anyway, but at least something for their money.

This. Even if Cyprus survives, the bank shares will be next to worthless.

[Warren Dew]

I would just note that removal of 10% of all bank deposits is not functionally much different from one year of 10% inflation.

Except, that if there were 10% inflation this year, then you'd be losing that, AND the 10% the government seized. However, usually when inflation is high, interest rates in bank accounts go up too, albeit never to fully compensate.

There won't be 10% inflation under the Euro. That's the whole reason for the exercise. Traditionally, the failing countries would simply have inflated their way out of their problems; with the euro, they can't, so they look for alternative means to achieve the same goal.

[macdoc]

Or devalued the currency as a way out - even more traditional. Same thing in some respects tho internally generated goods and services are not hit.