9
$\begingroup$

I've seen some articles online about the Cyprus-style bail-ins

When the bail-in actually happened there, they took money from people's accounts, but from where did they take the money?

For example, if someone had a CD there or a brokerage account with the bank, were those included as targets for bail-ins? Or was it limited to savings and checking accounts?

$\endgroup$
3
$\begingroup$

Apparently it's deposit accounts, which I think means both savings and checking accounts.

No, brokerage accounts are definitely not it, as they do not represent a liability for the bank. The issue is that the 'bail-in" is a reduction in the debt the bank has towards its depositors. When you own 100 of deposits, it's the bank that owes you, but when you owe a brokerage account that owns 100 of stocks, the bank owes you nothing. So, you received a statement from the bank saying you had 200000 euros in your account, then they impose a 40% levy on the uninsured part (100000). So next month you receive a bank statement that says you have now have 160000 in your account...

| improve this answer | |
$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.