The end of the EU

[libertas]

As the Cypriot savers are discovering the hard way, they are the creditors of the banks which are failing. Unfortunately, few people who have their savings in the bank think of themselves as creditors of the bank, but that is exactly what they are.

I disagree. When making a loan the lender is usually the one who sets the conditions of the loan i.e. interest rate, time till repayment etc. When you place your money in a bank none of these negotiations take place, you take what you are given. You place your trust in the bank that when you come to withdraw your money it will be there. Government sponsored deposit insurance and the Central Bank as lender of last resort fortify this trust.

In my view depositing money in a bank is more a case of fiduciary. You expect the bank as a fiduciary to take care of your money. Whether they do or not is neither here nor there. Banks by conducting themselves in an overly risky manner are breaking that trust with their depositors. If it wasn't for deposit insurance, the central bank and government support there would be bank runs across the Western World tomorrow because it is obvious to anyone with eyes and ears that banks are no longer trustworthy.

To suddenly change the 'rules' in Cyprus is nothing other than theft and a massive breach of trust on the part of the banks, government and the ECB.

 

[Splitlink]

I disagree. When making a loan the lender is usually the one who sets the conditions of the loan i.e. interest rate, time till repayment etc. When you place your money in a bank none of these negotiations take place, you take what you are given. You place your trust in the bank that when you come to withdraw your money it will be there. Government sponsored deposit insurance and the Central Bank as lender of last resort fortify this trust.

In my view depositing money in a bank is more a case of fiduciary. You expect the bank as a fiduciary to take care of your money. Whether they do or not is neither here nor there. Banks by conducting themselves in an overly risky manner are breaking that trust with their depositors. If it wasn't for deposit insurance, the central bank and government support there would be bank runs across the Western World tomorrow because it is obvious to anyone with eyes and ears that banks are no longer trustworthy.

To suddenly change the 'rules' in Cyprus is nothing other than theft and a massive breach of trust on the part of the banks, government and the ECB.

It is theft, without doubt, whether the ex-pat depositors were prudent to go to Cyprus is a different topic.

This is going to have repercussions across Europe and I do believe that Brussels was very lax in the time taken to sort this out, plus the fact that it sets a precedent that other governments will consider, if and when necessary.

I am very suspicious of Hollande. France has a fiscal policy that is causing the exit of many very wealthy residents. Hollande is calling them unpatriotic, if you like!

Cyprus was admitted into the Eurozone even though all so-called experts knew that it had a safe haven policy, paying higher rates of interest than anywhere else in Europe. Taxing depositors is the only way that Cyprus can meet Brussel's demands as colateral for the loan than it would receive and this smells, to me, of a Hollande/Merkel plan to finish the offshore aspirations of Cyprus.

The point is that, in addition, it has done terrible damage to the Euro in a way that is unbelievable for economies that are supposed to have so much financial talent. Surely, there has to be someone more capable?

 

[Pat494]

All those billions have disappeared into the EU economy and apparently nobody is to blame.
The local tearaway is caught stealing E100 worth of sweets from the corner store and he is in trouble. Seems unbalanced to me.
Don't think this has gone unnoticed by fraudsters in small banks. The modern Bonnie and Clydes are relaxing in the banks's boardrooms these days.

 

[new_trader]

I disagree. When making a loan the lender is usually the one who sets the conditions of the loan i.e. interest rate, time till repayment etc. When you place your money in a bank none of these negotiations take place, you take what you are given. You place your trust in the bank that when you come to withdraw your money it will be there. Government sponsored deposit insurance and the Central Bank as lender of last resort fortify this trust.

In my view depositing money in a bank is more a case of fiduciary. You expect the bank as a fiduciary to take care of your money. Whether they do or not is neither here nor there. Banks by conducting themselves in an overly risky manner are breaking that trust with their depositors. If it wasn't for deposit insurance, the central bank and government support there would be bank runs across the Western World tomorrow because it is obvious to anyone with eyes and ears that banks are no longer trustworthy.

To suddenly change the 'rules' in Cyprus is nothing other than theft and a massive breach of trust on the part of the banks, government and the ECB.

It isn't a matter of opinion, it is a matter of fact. Depositors are creditors of the bank. You are paid interest on savings because the bank uses the money to make loans. If you don't believe me, look at a bank balance sheet to see what they regard as assets and liabilities. Depositing money in a bank savings a/c is not the same as depositing money in a safety deposit box that is held in the bank.

 

[Splitlink]

True, yes, but the bank has a moral obligation to account holders to use their money in a responsible fashion, otherwise, where on earth are we supposed to keep our money?

That is why the British government hastened to protect the savings of account holders of UK banks.

Now there is a move, and quite rightly so, for banks to separate their savings side from their, more risky investment arm.

We must not be too smug about this. The UK banking system almost went under and it is no good blaming the Euro for that. Bankers' greedy methods have swept across the whole of the planet but this is the first time that a government wanted to slap a 10% tax on every account, regardless of size.

IMO, money deposited in an account must be protected, both by bank and government plus, in this case, Brussels.

 

[counter_violent]

It is theft, without doubt, whether the ex-pat depositors were prudent to go to Cyprus is a different topic.

This is going to have repercussions across Europe and I do believe that Brussels was very lax in the time taken to sort this out, plus the fact that it sets a precedent that other governments will consider, if and when necessary.

I am very suspicious of Hollande. France has a fiscal policy that is causing the exit of many very wealthy residents. Hollande is calling them unpatriotic, if you like!

Well he would wouldn't he ! Socialist scumbag who just wants his hands on their loot.

Cyprus was admitted into the Eurozone even though all so-called experts knew that it had a safe haven policy, paying higher rates of interest than anywhere else in Europe. Taxing depositors is the only way that Cyprus can meet Brussel's demands as colateral for the loan than it would receive and this smells, to me, of a Hollande/Merkel plan to finish the offshore aspirations of Cyprus.

The point is that, in addition, it has done terrible damage to the Euro in a way that is unbelievable for economies that are supposed to have so much financial talent. Surely, there has to be someone more capable?

Yes but alas Mrs T is very frail now and not up to the job. But we do have Farage

And finally, this sums it all up.

What Charles Dickens said about money – 12 memorable quotes - Telegraph

 

[new_trader]

True, yes, but the bank has a moral obligation to account holders to use their money in a responsible fashion, otherwise, where on earth are we supposed to keep our money?

That is why the British government hastened to protect the savings of account holders of UK banks.

Now there is a move, and quite rightly so, for banks to separate their savings side from their, more risky investment arm.

We must not be too smug about this. The UK banking system almost went under and it is no good blaming the Euro for that. Bankers' greedy methods have swept across the whole of the planet but this is the first time that a government wanted to slap a 10% tax on every account, regardless of size.

IMO, money deposited in an account must be protected, both by bank and government plus, in this case, Brussels.

The Government wants and even encourages banks to make loans because it makes their voting public happy, why do you think the dumbasses in charge are giving First home buyers interest free loans to buy property? Governments guarantee deposits so banks make loans to people that are otherwise uncreditworthy.

If it wasn't for the Government insured deposits, banks would be much more responsible with their lending and deposits would be safe because customers would actually care about how the bank is using their money.

It's ironic, but banking has become unsound because of Government insured deposits. Now, watch all the free-market hating socialists chime in

Anyway, study the history of Banking and you will see that I am right.

 

[counter_violent]

For anyone who is interested or can be bothered reading it.

The End Of Britain
No different in Europe either.

 

[Splitlink]

The Government wants and even encourages banks to make loans because it makes their voting public happy, why do you think the dumbasses in charge are giving First home buyers interest free loans to buy property? Governments guarantee deposits so banks make loans to people that are otherwise uncreditworthy.

If it wasn't for the Government insured deposits, banks would be much more responsible with their lending and deposits would be safe because customers would actually care about how the bank is using their money.

It's ironic, but banking has become unsound because of Government insured deposits. Now, watch all the free-market hating socialists chime in

Anyway, study the history of Banking and you will see that I am right.

I am unfamiliar with UK banks, now, but what was the case with Northern Rock? Were those accounts insured in any way? I get the impression that the people queueing around the block felt that their money would be better out. After that, there was a massive government takeover of banks in trouble.

BTW, Remember the good, old-fashioned building societies, before they became banks? That was a Thatcher idea, if I recall, although, I don't want to blame her if it is not true! She's carrying a lot of blame, already.

 

[Atilla]

I am unfamiliar with UK banks, now, but what was the case with Northern Rock? Were those accounts insured in any way? I get the impression that the people queueing around the block felt that their money would be better out. After that, there was a massive government takeover of banks in trouble.

BTW, Remember the good, old-fashioned building societies, before they became banks? That was a Thatcher idea, if I recall, although, I don't want to blame her if it is not true! She's carrying a lot of blame, already.

The same people here who talk about the free market and small government are the same people who thought the sun shone out of Mrs Thatcher's handbag.

Big bang and self regulation coupled with a love affair based on the free Raeganomics of US style banking was the craze late last century.

Let's decimate our manufacturing and import everything to teach those pesky unions to respect our authoritooor

Sell off national industries. Privatise the lot and here we are with poor service at exorbitant rates and prices.

Nice move on the council tax. Nice move on sale of council properties. Nice move on subsidising the car and building more roads. Now we are charged to death with parking fees.

Big bang of the big banks literally. Marvelous! Those bankers are worth their numeration, bonuses and pensions and shares

Nice move on giving politicians a free reign on claiming expenses.

Nice move on bashing the Europeans when they grew for the last 30 years.

Let's bash them some more because we are so much mightier than though...

Need a good tumbler with a hint of cynicism to drown our sorrows I reckon. :cheers:

 

[libertas]

Depositors are creditors of the bank. You are paid interest on savings because the bank uses the money to make loans.

I agree with the you that banks treat depositors as creditors but whether they should or not is another point.

The idea of paying interest to depositors is to encourage depositors to put their money in the bank. I agree that the interest paid by the bank is supposed to come from the banks prudent investment of these customer deposits.

 

[neil]

I remember when banks only lent money deposited by savers

 

[libertas]

The Government wants and even encourages banks to make loans because it makes their voting public happy, why do you think the dumbasses in charge are giving First home buyers interest free loans to buy property? Governments guarantee deposits so banks make loans to people that are otherwise uncreditworthy.

Yes and concurrently they hope to keep house prices inflated above their natural level. This is seen as a great boon for the middle-classes.

If it wasn't for the Government insured deposits, banks would be much more responsible with their lending and deposits would be safe because customers would actually care about how the bank is using their money.

Yes couldn't agree more. At the moment you don't have to give a fig about the state of your bank unless you have over the insured amount of funds at risk in the bank. If deposits were not insured everyone would have to think carefully about who they deposited with and like you say banks would have to become far more responsible to attract these funds. Of course the implied and real promise of government help for the ' too big to fail' banks doesn't not help the situation either.

 

[libertas]

I remember when banks only lent money deposited by savers

Really Neil?! Fractional reserve banking goes back to at least the creation of the Bank of Amsterdam in 1609.

 

[libertas]

Let's decimate our manufacturing and import everything to teach those pesky unions to respect our authoritooor

There are many reasons for the destruction of the manufacturing sector. Most of these reasons stem from government regualtions and taxes. Other reasons include the minumum wage and wage inflation casued by over powerful unions

Sell off national industries. Privatise the lot and here we are with poor service at exorbitant rates and prices.

How is the NHS working out for you??


Nice move on the council tax. Nice move on sale of council properties. Nice move on subsidising the car and building more roads. Now we are charged to death with parking fees.

Have you ever actually been to a council estate? The differnece between a council estate and private estate of the same socio-economic group is marked. People look after what they own :idea:

Big bang of the big banks literally. Marvelous! Those bankers are worth their numeration, bonuses and pensions and shares

Nice move on giving politicians a free reign on claiming expenses.

Nice move on bashing the Europeans when they grew for the last 30 years.

http://4.bp.blogspot.com/-rtk16HuUp2c/TsWzvhipWUI/AAAAAAAAQQ4/WhK-lLSq2kM/s1600/worldgdp.jpg

Let's bash them some more because we are so much mightier than though...

Need a good tumbler with a hint of cynicism to drown our sorrows I reckon. :cheers:

 

[Splitlink]

I remember when banks only lent money deposited by savers

That, for sure, is what a building society. was all about. They, only, lent money to housebuyers and the deeds were in their possession until the house was paid for.

Someone saw all the money that they had and said "Hey, that's a ridiculous rate of interest (2.5%) for depositors to get. Let's turn them into banks so that we can use their money".

 

[Atilla]

Yes there are many reason for destruction of manufacturing industry including poor management and lack of investment. Japanese can manage British labour force better than our own management. How is that?


NHS is great. You don't throw the baby out with the bath water. Simply needs to be managed with a quota on what people can consume. Embrace a combination of some basic cover with personal responsibility.


I think you'll find half of London has lived on a council estate at one time or another and quite a few still do. Brixton is a great place; vibrant and thriving, exciting place to live - before and now. Tottenham even

I think looking after a place has also something to do with disposable income and employment.

As for your chart - I was making a note comparing UK to our neighbours in the EU; such as Italy, Spain and Portugal who developed very well alongside France and Germany.


In general usually nations or leaders or even company success has more to do with the general environment and climate it happens to be in than any single leaders rule. Thatcher happened to reign whilst the whole globe was booming. Even so she dragged the UK into a much deeper recession than was necessary post 79-80s etc.

What could be managed was cut off and disposed. Instead of dealing with issues she simply buried them. Now we are seeing the off-shoots. :idea:

 

[barjon]

.................. Thatcher happened to reign whilst the whole globe was booming. Even so she dragged the UK into a much deeper recession than was necessary post 79-80s etc.

What could be managed was cut off and disposed. Instead of dealing with issues she simply buried them. Now we are seeing the off-shoots. :idea:............

aye, and she had the North Sea oil coming on stream - couldn't go wrong really. But she did and all the riches were squandered for the want of forward investment. I had no problem with stopping propping up "old" failing industries (as long as you don't just abandon the communities involved), but the trick is to stay ahead of the game. When people can make things cheaper than you because of labour costs, you concentrate on making the machinery they need to use and that requires forward investment and stimulus.

It seemed to be a case of "Oh bugger it, we're rich and we'll just make money with our money and pay other people to do the dirty work". Ever since our "riches" have been draining away at an alarming rate, the making money with money boys have turned out to be irresponsible scallywags, we've not found a way to spread the wealth around as manufacturing industry did, we've lost essential pools of expertise (we don't have the expertise to build a nuclear power station anymore even if we wanted to) and we've lost control of our essential Public Utilities as well.

All pretty gloomy, I know, but where are we now. Without natural resources , without "leading edge" manufacturing capacity and with the supposed "money machine" of the financial sector in disarray where is the political vision to take us forward?

Harold McMillan used to say when PM "My job is to manage a declining Nation". I don't think it needs to be like that, but it requires some far sighted leadership and and the vision to think beyond five years. We've not got that either!!!

 

[counter_violent]

Some very puzzling points of view on this thread.

Lets suppose for a min that there was no benefits system. What would happen to the people who were previously in receipt? Do you think they would accept their lot and quietly wither away, or do you think they would suddenly develop drive and a work ethic in order that they would survive?

I suggest you might benefit from studying the works of Milton Friedman.
Free to Choose: Part 1 of 10 The Power of the Market (Featuring Milton Friedman) - YouTube

Govt is better for everyone when it is small and out of everyones lives.

 

[new_trader]

When people can make things cheaper than you because of labour costs,

Yes Jon...but what is that makes labour cheaper? Think of a self employed man panning for gold in the U.K and a self employed man panning for gold in China. Assuming they are both as proficient as each other, what is the difference between their tools? Answer:ZERO. What is the difference between their Productivity? Answer:ZERO. What is the difference in their costs? Well that is ALL down to taxes and regulations which come from Government. You keep blaming 'labour costs' as if it is some esoteric problem with unknown origins.