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http://www.protothema.gr/politics/article/?aid=267996
I would be rioting right now, if I had to pay that tax.
Cyprus bailout inside info? 132 companies pull out over $900mn in depositsUS$916 million
- Thread starter Ilikeitblackplease
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http://www.protothema.gr/politics/article/?aid=267996
I would be rioting right now, if I had to pay that tax.
Soldato
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Would you?
Have youmsavings of more than £85000 held in a single institution?
If not you wouldn't be paying any tax.
Unlike here where you are paying for Gordon Browns mistakes, and your children will continue to pay for them.
Have youmsavings of more than £85000 held in a single institution?
If not you wouldn't be paying any tax.
Unlike here where you are paying for Gordon Browns mistakes, and your children will continue to pay for them.
I think it might be difficult to prosecute in these cases.
How do you distinguish between those who had prior knowledge of the plan, and withdrew their cash to avoid the "haircut" (clearly illegal), and those that just recognised the dire situation Cyprus was in and transferred their funds elsewhere (arguably just good foresight and solid business practice)?
Don't get me wrong, I would be fuming if I had to pay the duty while others slipped away into the night. But it could be very difficult to prove that companies knew in advance what was going to happen.
How do you distinguish between those who had prior knowledge of the plan, and withdrew their cash to avoid the "haircut" (clearly illegal), and those that just recognised the dire situation Cyprus was in and transferred their funds elsewhere (arguably just good foresight and solid business practice)?
Don't get me wrong, I would be fuming if I had to pay the duty while others slipped away into the night. But it could be very difficult to prove that companies knew in advance what was going to happen.
Ordinary citizens of Cyprus are very much "paying the price" in the same way that we are, for their country's financial state. It's just that those with less than 100k eur deposits aren't paying the one-off 25% balance tax. The one does not wipe out the other...
On a related note, I find it generally distasteful that depositor funds are being used to cover the gambling losses of the banks. I understand the argument, and I'm glad it's restricted only to large deposits, but it still just doesn't sit right with me.
Nor should it. The whole world just feels like its in a degenerative loop at the moment. Certain people have created a system that makes prospering at others expense far too easy. Institutions fail and 99% of people involved in the management of that business couldn't care less because they ran it into the ground for their own profit. Why on earth would someone earning millions a year at a bank care if their trading practices bankrupt the company and lose thousands of people their savings.
Humans are inherently greedy, self serving and self entitled. We assume that we will simply put our minds to a problem and solve it when it gets bad enough. By that stage I fear we will have created too deep a hole.
Soldato
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So remove the abilities of banks to bet against investments, disavow hedge funds.
Why is it clearly illegal even if they knew?
![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
I'm not sure the sort of person who has over 100k in cash in the bank is the sort to protest by rioting.
The simpler way is to separate retail banks from investment banks. 5he US introduced this requirement soon after the great depression (it was called the Glass-Stegal act), but it was repealed by the Clinton administration.
If I could see two simple banking reforms implemented worldwide then they would be:
a) separation of retail and investment banking (as above)
b) introduction of a very small (<1 cent) transaction fee, to prevent high frequency trading (that kind of trading scares the hell out of me...).
It's insider trading. But as with traditional insider trading, often very difficult to prove.
I'm skeptical - can you show me how withdrawing a deposit breaches insider trading rules?
What scares the hell out of me is that no one actually understands the effects of all the competing algorithms that are left to run freely on the markets. Slight errors can cost billions and how on earth is it a good idea to have a system which no one understands.
The whole system just seems ripe for abuse and the only measures in place to stop it seem to be be gentlemans agreements. Its almost like it was designed to allow huge amounts of money to be made under any circumstance and for that money to be easily disconnected from the means by which it was gained.
The whole system just seems ripe for abuse and the only measures in place to stop it seem to be be gentlemans agreements. Its almost like it was designed to allow huge amounts of money to be made under any circumstance and for that money to be easily disconnected from the means by which it was gained.
I can't (not my area of expertise), and you may be right. But this is something of a unique situation. I don't recall people's bank deposits being sequestered to pay for company losses in the past. It may be up to the courts to determine whether there was criminal intent (not that I expect any of these large companies to actually appear in court)
Still, if the withdrawals were made after the decision to shut the banks, but before that information was made public, then at the very least there will be serious questions.
there might well be serious questions asked of politicians, bank officials etc.. though for others I can't see what they'll do
I don't believe there will be anything for the courts to look at - I'm pretty sure insider trading laws don't apply to deposits, just as they don't apply to many other things.. FX, commodities etc... Maybe Cyprus does have some law that covers it but I'm pretty skeptical that they would.
Why do you feel high frequency trading is something that needs to be stopped? Can you think of any other issues the 'small' transaction fee might cause?
Supposing you're a pension fund and you want to hedge some exposure to short term rates.. there are virtually no liquidity providers left in the market (perhaps just a few big market makers), volumes have dropped rapidly, spreads have increased and not only are you now taking a hit on your funds from these transaction fees but when you come to place your hedge and the market drops like a stone with practically no liquidity providers in the way to stop it...
Yay lets introduce a badly thought out tax with no clear objective but with plenty of negative effects including disincentives regarded the use of exchanges/clearing facilities, driving away liquidity and increasing volatility... so essentially encouraging everything that we should have learned by now is bad.
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Most on that list were linked to those that knew, from what i've been told. like a politicians daughter company.
There have been recent incidents of slight computer malfunctions leading to hundreds of millions in losses, in a matter of minutes (for example this $440m loss in 45 mins). The "clear objective" is to dissuade ultra high-frequency trading, where hundreds of thousands of trades can be made per minutes, and the "biggest winner" is he with the fastest computer, and closest link to the electronic trade hub (an extra few nanoseconds to get your trade in first can make all the difference).
Frankly, this entire class of algorithmic trading frightens me. Removing the human element from trades entirely, and letting the algorithms 'run wild' gaining margins from within the noise itself is not my idea of a well-formed financial system. Losses in the hundred-millions to low Billions range (as in the example above) will not significantly disrupt the global financial system, but what is to stop much larger losses occurring in the future? As computers and network connections become faster, this kind of trading will only grow in volume if it remains unregulated.
A tiny transaction tax (of the order 1/10th or 1/100th of a cent per transaction) will not make a noticeable difference to "normal" trades involving any sizable sum of money - certainly not in the pension fund example you give above. They will only be of concern to the kind of microscopic automated transactions that take place in computer-driven micro-trades.
A computer malfunction is comparable to fat finger mistakes and even traders going rogue and losing billions, just because fat finger losses happen doesn't mean we should allowing people to trade should we.
That malfunction you linked is not really a reason to curb HFT is it.
The main concern is the potential for essentially unbounded losses in frighteningly short timescales. Human errors, whether truly errors or "rogue" behaviour, happen on much much longer timespans.
edit: The best known example would probably be the "flash crash" of 2010. The Dow Jones lost 9% of its value (?!) in about 4 minutes, before gaining it back in a similar amount of time. If the sudden drop had been 20%, or 40%, would the market have recovered so easily from the 'bump'?
I'm not saying that high frequency trading should be banned outright, only that measures should be taken internationally to try to prevent these kinds of mistakes.
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