Tuesday, March 26, 2013
Some higher up Euro-zone muckity muck has announced that a lot more citizens bank accounts may be raided in the future, if their government see's fit. His point being that pulling it off in Cyprus without a systemic bank run proves it can be done.
Given that banks pay no interest to speak of, and certainly will not be offering anything in exchange for this new added risk of wholesale theft, why in the name of all the gods would any sane person keep large amounts of money in the bank?
The main risk (so far) is to those with accounts exceeding the maximum insured amount of 100K. I gather the thinking is to raid smaller accounts would surely start a worldwide bank run. The thing is.... people with enough money to leave 100K laying impotently in a near-zero interest bank account also have the means to protect it themselves. Safes do not cost a lot.... really, they don't.
I have to wonder if we will not see a slow but heavy decapitalization of banks worldwide as savers realize their money is no longer safe from thieves in their bank of choice.