Were Taxpayers Really Spared in the Cyprus Banking Crisis?
The claim here that taxpayers were spared in the Cyprus banking crisis settlement misses the mark:
This is a typical media deflection away from what's really going on here. Far too little has been said, for example, about the complete lack of regard for the rule of law and the fundamental fact that what was originally proposed was stealing other people's money: the first proposal included stealing money from depositors whose deposits were insured., i.e. guaranteed by the government. Indeed, these comments don't acknowledge that not only bondholders, but depositors over the insurance limit will have money expropriated. There's been no clear explanation of how the decision to expropriate 40% on those larger accounts was calculated. (In fact, the latest plan would appear to take 62.5% of the account owners money.) If stockholders were completely wiped out, and bondholders were wiped out according to their seniority, then - consistent with rule of law - those with uninsured accounts should take their hit. But it's not at all clear that this is how things are proceeding.
So this snide commentary about the Europeans and their banks seems driven by the typically arrogant American attitude that we are somehow superior to those left-wing socialist Euro governments. (Why let facts stand in the way?) Isn't it disturbing that bureaucrats have just "made up" a solution without even the attempt to justify it according to rule of law? Rather they have approached this from the point of view of what they claim needs to be done, the law be damned. It's socialism at work, using power and expediency (usually in the name of "the people") rather than reason and what's right under the law to address a problem.
If you want to continue to believe that we aren't at best a step or two behind them in our march to socialism, and our acceptance and practice of the methods of lawless socialists, then dream on.
...the European Union had already been considering new rules that would require senior bank bondholders to take losses in any government rescue. This is the same principle behind the Cyprus bailout: that investors shouldn't think of their decidedly not-risk-free investments as risk-free. That's a precedent to cheer in euro zone's fourth sovereign rescue...The author goes on to trumpet the saving of taxpayers in this settlement (the details of which are still unclear). But aren't the depositors of the banks taxpayers? So this "saving the taxpayer" theme seems not to be what's really going on here.
This is a typical media deflection away from what's really going on here. Far too little has been said, for example, about the complete lack of regard for the rule of law and the fundamental fact that what was originally proposed was stealing other people's money: the first proposal included stealing money from depositors whose deposits were insured., i.e. guaranteed by the government. Indeed, these comments don't acknowledge that not only bondholders, but depositors over the insurance limit will have money expropriated. There's been no clear explanation of how the decision to expropriate 40% on those larger accounts was calculated. (In fact, the latest plan would appear to take 62.5% of the account owners money.) If stockholders were completely wiped out, and bondholders were wiped out according to their seniority, then - consistent with rule of law - those with uninsured accounts should take their hit. But it's not at all clear that this is how things are proceeding.
So this snide commentary about the Europeans and their banks seems driven by the typically arrogant American attitude that we are somehow superior to those left-wing socialist Euro governments. (Why let facts stand in the way?) Isn't it disturbing that bureaucrats have just "made up" a solution without even the attempt to justify it according to rule of law? Rather they have approached this from the point of view of what they claim needs to be done, the law be damned. It's socialism at work, using power and expediency (usually in the name of "the people") rather than reason and what's right under the law to address a problem.
If you want to continue to believe that we aren't at best a step or two behind them in our march to socialism, and our acceptance and practice of the methods of lawless socialists, then dream on.
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