IT’S OFFICIAL: Banks In Europe May Now Seize Deposits To Cover Their Gambling Losses!

“For the first time since the collapse of Lehman  Brothers, those who lend their money to banks or keep their money in banks  are at risk.”

• IT’S OFFICIAL: Banks In Europe May Now Seize Deposits To Cover Their  Gambling Losses! 
  by Henry Blodget, http://www.businessinsider.com/ 
  As expected, Cyprus and  the EU reached a  new late-night bailout deal last  night that will reduce the chance that Cyprus’s financial system and economy  will completely implode. The new deal is better than the  last deal in one key respect:
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  Deposits under 100,000 euros will be protected
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  That’s very important. Those deposits were ostensibly “insured.” To seize  them, the way the last bailout deal would have, would have been grossly unfair  and would have set a truly alarming precedent.
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  Now, small depositors in European banks can breathe more easily. At least in  this case of gross malpractice on the part of reckless bank managers, their life  savings have been preserved. Alas, the good news ends there.
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  Although deposits under 100,000 euros will be spared, deposits over 100,000  euros will be seized and subjected to an as-yet undetermined haircut–with the  confiscated money going to bail out the gambling losses of the aforementioned  reckless idiots who run some of Cyprus’s banks.
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  This seizure, needless to say, will dampen the enthusiasm of rich depositors  for keeping money in banks that get themselves into financial trouble. And because many, many banks in Europe have gotten themselves into financial  trouble, this will create a general state of unease among rich depositors  throughout the Eurozone.
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  And it should wig out some bank lenders, as well. After all, never before in the history of this global financial crisis has a  major banking system allowed depositors to lose money, no matter how reckless  and stupid and greedy their bank managers have been. And only rarely have bank  lenders–those who hold bank bonds–been asked to pony up.
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  In this case, however, the depositors will lose money. Perhaps a lot of  money. And if there had been big bank debtholders in Cyprus, they probably would  have been socked with losses, too.
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  read more!

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