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Cyprus banks may never open again
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[quote:Anonymous Coward 36146552:MV8yMTc0MDc0XzM2NzcxODg0XzNBQzYxMTA1] Let me explain this in legal terms. When you make a deposit, your money doesnt go into a box with your name on it at the bank. the money actually and legally goes into the general fund of the bank to be used for ordinary business expenses and serve as a basis to make loans. What you get in return for your deposit is an "iou" payable upon demand. its a simple contract between you and the bank. your deposit is a 0% interest loan to the bank and it is legally required to pay it back upon your demand....in legal terms, its a demand note. you are assigned an account number with your initial deposit or loan, and then future loans and payments are documented over time....i.e. your account statement. then notion that you have money in the bank is an illusion...all you have is a contractual obligation for the bank to pay you back...you have no money in the bank so to speak. the idea that the bank of cyprus is seizing 15% of deposits is an illusion too. essentially, the EU banks are telling the Cyprus banks that it is authorized to reduce demand note repayments down 15% in order to get the EU bailout... the German Finance Minister has already said that the Bank of Cyprus is insolvent...which means that if everyone in the bank came to "withdraw their money" or demand repayment of their demand notes at once, the bank would not have the money on hand to pay it out and the bank would essentially fail. therefore, the bank needs to reduce its repayment obligations by 15% to increase its liquidity to better secure the repayment of the EU bailout. however, news of this is going to cause a bank run, which will cause the bank of cyprus to fail..the EU bank is forcing the bank to take its bailout or risk the bank run and go out of business...its a hard nose tactic by EU banks to get Cyprus Bank to take the bailout on very favorable terms to the EU banks. this bank run issue is part of the plan...all it does is make the bank's failure imminent..they cannot take the bank over till it fails..this bank run will do cause the failure quickly and they are using the media to perpetuate it. they are also using the media to get bank runs going on other banks in the EU...the big banks cannot reorganize all the other banks till they fail...so here comes the bank runs. they dont care to get the 15% "deposit funds" as the funds are a tiny portion of the total bailout..they want the banks...if they cant get the banks, like Cyprus, to accept their bailout terms, then they will force "deposit seizures", which as i said above, is really an illusion, but freaks people out and makes them run on the banks...this will cause the banks to fail and then they can get them and reorganize..they will get the banks either way through bailout acquisition or upon failure from bank runs...its just a matter of time. i hope the Bank of Cyprus can hold it together or the future of that island is gone forever... good luck [/quote]
Original Message
"Germany's finance minister has warned Cyprus that its crisis-stricken banks may never be able to reopen if it rejects the terms of a bailout."
"There may have been jubilation among many Cypriots at Tuesday night's parliamentary defeat of the hated banking tax, but now the country faces a tough reality."
[
link to www.cyprusexpat.co.uk
]
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