Central Bank not protecting deposits

bituperio

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Quote from: Iranus on December 05, 2017, 01:41:51 PM

Quote from: merchantofzeny on December 05, 2017, 01:02:32 PM

Do you have links?

http://www.zerohedge.com/news/2017-11-19/ecb-proposes-end-deposit-protection

If you want to read the full paper, it's here.

Quote from: bituperio on December 04, 2017, 08:00:44 AM

Do you think it will happen?

If it does, I suspect it'll happen over a long and gradual transition period taking several years, and I suspect that they'll try their best to keep it quiet.

People still have the misconception that central banks create the majority of money in a country when it's actually made by retail banks, so they could hold the misconception that their deposits are insured for a long time.

Quote from: merchantofzeny on December 05, 2017, 01:02:32 PM

Do you think bitcoin and alts will moon even more?

I doubt it'll have that much effect for now.

Oh, I have basic knowledge of the bank multiplier and all that. A bank is allowed to create much more than it has in reserves, thus "multiplies" the amount of money in the system right?

BillyBobZorton

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Quote from: NeuroticFish on December 06, 2017, 10:45:39 AM

Quote from: BillyBobZorton on December 06, 2017, 10:38:49 AM

Typically, deposits above $100,000 have never been protected, in other words, if a bank goes south and you are holding $200,000, you lose $100,000. "Fortunately", I have never had anywhere near close to $100,000 so I had never worried about that.

Actually (afaik) if you have 10 different banks in your country you can deposit 100k EUR in each bank having 1 mil actually protected.
I think that they should first limit that.

Quote from: BillyBobZorton on December 06, 2017, 10:38:49 AM

What this news means is that even deposits below $100,000 will still be not guaranteed to be safe? because that is insane. The small guy (like me and most people) would lose all of their money, the rich always have options. Well, another reason to buy and hold BTC.

This is what I also understood and it's indeed insane. It sounds like they prepare for a new crash.
However, this is not a reality yet, it's only a proposal that has to be discussed and possibly applied. Still, it sounds bad for fiat and sounds good for Bitcoin

Yes, I always assume that's what rich people do with their money, they open a couple bank accounts on different places, and also another reason why most rich people don't get their money on bank accounts is to avoid these possible crashes, so they put it on mutual funds, or "safe" stocks like Coke, Berkshire Hathaway or the S&P500. I have no idea what I would do if I had that money, it's rather stressing.. I wish that I had these kind of problems instead of having to figure out how to pay the next monthly bill tho.

radeone

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The banking overlords will have a tough time if money isn't protected at that level.

NeuroticFish

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Quote from: BillyBobZorton on December 06, 2017, 10:38:49 AM

Typically, deposits above $100,000 have never been protected, in other words, if a bank goes south and you are holding $200,000, you lose $100,000. "Fortunately", I have never had anywhere near close to $100,000 so I had never worried about that.

Actually (afaik) if you have 10 different banks in your country you can deposit 100k EUR in each bank having 1 mil actually protected.
I think that they should first limit that.

Quote from: BillyBobZorton on December 06, 2017, 10:38:49 AM

What this news means is that even deposits below $100,000 will still be not guaranteed to be safe? because that is insane. The small guy (like me and most people) would lose all of their money, the rich always have options. Well, another reason to buy and hold BTC.

This is what I also understood and it's indeed insane. It sounds like they prepare for a new crash.
However, this is not a reality yet, it's only a proposal that has to be discussed and possibly applied. Still, it sounds bad for fiat and sounds good for Bitcoin

BillyBobZorton

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Typically, deposits above $100,000 have never been protected, in other words, if a bank goes south and you are holding $200,000, you lose $100,000. "Fortunately", I have never had anywhere near close to $100,000 so I had never worried about that.

What this news means is that even deposits below $100,000 will still be not guaranteed to be safe? because that is insane. The small guy (like me and most people) would lose all of their money, the rich always have options. Well, another reason to buy and hold BTC.

merchantofzeny

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Quote from: Iranus on December 05, 2017, 01:41:51 PM

Quote from: merchantofzeny on December 05, 2017, 01:02:32 PM

Do you have links?

http://www.zerohedge.com/news/2017-11-19/ecb-proposes-end-deposit-protection

If you want to read the full paper, it's here.

Thanks. I've read the one in zerohedge first. Not really as financially literate as I want to be but just the thought of removing the insurance is just insane. I mean, you don't even have to be buying their investment plans to be affected. The way this is reported, it seems even simply having a savings account would put you at risk if the bank goes under.

This one in particular angers me...

Quote

"...during a transitional period, depositors should have access to an appropriate amount of their covered deposits to cover the cost of living within five working days of a request."

BillCoin

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Quote from: merchantofzeny on December 05, 2017, 01:02:32 PM

Do you have links? I'd like to read about it. Ah, greedy, greedy bankers. The main reason people still put their money in banks is for liquidity and safekeeping. Take away the insurance and they'd probably just invest them all elsewhere and hide some in vaults at home.

Oh wait, only savings in banks are not taxed, right? Money kept at home and those in other investments are taxable. Sneaky, sneaky.

It's not the only greedy movement that bankers do to protect their business.

As bitcoin aims to destroy banks, big banks over the world go over with statements that bitcoin is a completely scam, is going to collapse and everybody who invests in it is stupid.

Not only that, they cancel all transactions that goes from and to crypto currencies exchanges over the world, they are trying to prevent people from investing in bitcoin and other virtual currencies.

Hydrogen

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Quote from: Iranus on December 05, 2017, 01:41:51 PM

Quote from: merchantofzeny on December 05, 2017, 01:02:32 PM

Do you have links?

http://www.zerohedge.com/news/2017-11-19/ecb-proposes-end-deposit-protection

If you want to read the full paper, it's here.

That illustrates well how protections and guarantees on fiat currencies like the dollar and euro are being eroded or dropped around the globe.

Spokespersons in the media continue to label bitcoin a "ponzi scam" and "bubble".

Evidence to the contrary suggests the dollar and euro are the real bubbles as we see banks limiting withdrawals, eliminating insurance protections on accounts while china, russia and even venezuela eliminate the "petro dollar" in their shift to denominate oil transactions in every currency in the world except the US dollar.

If banks fail again as they did in 2008, the "too big to fail" ideology may be unsustainable due to the US deficit being too massive. It would seem that preparing for global economic meltdown fueled by crashing dollars and euros is the new normal. Everywhere you look its becoming an industry standard.

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Quote from: pugman on December 05, 2017, 01:47:16 PM

Quote from: bituperio on December 04, 2017, 08:00:44 AM

Have you read anything about this? It seems that the European Central Bank is playing with the idea of no longer protecting deposits. Do you think it will happen? Do you think bitcoin and alts will moon even more?

European central bank? Seriously? Seems fun to know about it. Protecting deposits in the sense you mean that the treasury bills that the central bank issues to the people on behalf of the government? Because as far as I know, central banks usually don't accept deposits from general public, commercial banks do accept and the commercial bank have to separate some amount of deposits and keep it aside as a part of the SLR reserve before handing out the deposits as loans to other people. Or is it just limited to one economy and other economies have different rules on deposits and reserves? Correct me if I'm wrong, central banks never accept normal deposits, they only give out treasury bills sort of thing, right?

Let's agree to some point that if the central bank of Europe is willing to play with idea of no longer protecting the deposits of people, the people will start leaving the country . What will be the use of them staying in a country wherein the central bank itself cannot be trusted. Bitcoin will be considered later on, people care about their safety first. I'm sure there is some other reason behind the motive of playing with people's deposits, some catch is there definitely.

European central bank gives directives to banks with the goal to control the monetary policy for the Euro and the Eurozone. Banks don't need to keep a percentage of the deposits for the SLR reserve. The SLR reserve exists in India only.

As for the article, i think for most of us European citizen it's not so surprising and we were somehow excepting something like this soon or later. it's like the life insurances that are now dead...

seizetehday5

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Wow

. Seriously this is great news for crypto I can't even believe they would do that. I thought it was stupid to only protect up to 100k because you are giving rise to offshore accounts as well as other shadier activities. But this is even worse and this will be good for crypto I am happy about that at least

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Quote from: Iranus on December 05, 2017, 01:41:51 PM

Quote from: merchantofzeny on December 05, 2017, 01:02:32 PM

Do you have links?

http://www.zerohedge.com/news/2017-11-19/ecb-proposes-end-deposit-protection

If you want to read the full paper, it's here.

I 100% expected this to be FUD. Well, one more proof that banksters live in their own universe lol.
This can be only good for Bitcoin as an asset. Of course, not overnight, but people have to keep some money somewhere safe. Bitcoin and gold are 2 of the options, I guess.

pugman

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Quote from: bituperio on December 04, 2017, 08:00:44 AM

Have you read anything about this? It seems that the European Central Bank is playing with the idea of no longer protecting deposits. Do you think it will happen? Do you think bitcoin and alts will moon even more?

European central bank? Seriously? Seems fun to know about it. Protecting deposits in the sense you mean that the treasury bills that the central bank issues to the people on behalf of the government? Because as far as I know, central banks usually don't accept deposits from general public, commercial banks do accept and the commercial bank have to separate some amount of deposits and keep it aside as a part of the SLR reserve before handing out the deposits as loans to other people. Or is it just limited to one economy and other economies have different rules on deposits and reserves? Correct me if I'm wrong, central banks never accept normal deposits, they only give out treasury bills sort of thing, right?

Let's agree to some point that if the central bank of Europe is willing to play with idea of no longer protecting the deposits of people, the people will start leaving the country . What will be the use of them staying in a country wherein the central bank itself cannot be trusted. Bitcoin will be considered later on, people care about their safety first. I'm sure there is some other reason behind the motive of playing with people's deposits, some catch is there definitely.

Iranus

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Quote from: merchantofzeny on December 05, 2017, 01:02:32 PM

Do you have links?

http://www.zerohedge.com/news/2017-11-19/ecb-proposes-end-deposit-protection

If you want to read the full paper, it's here.

Quote from: bituperio on December 04, 2017, 08:00:44 AM

Do you think it will happen?

If it does, I suspect it'll happen over a long and gradual transition period taking several years, and I suspect that they'll try their best to keep it quiet.

People still have the misconception that central banks create the majority of money in a country when it's actually made by retail banks, so they could hold the misconception that their deposits are insured for a long time.

Quote from: merchantofzeny on December 05, 2017, 01:02:32 PM

Do you think bitcoin and alts will moon even more?

I doubt it'll have that much effect for now.

merchantofzeny

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Do you have links? I'd like to read about it. Ah, greedy, greedy bankers. The main reason people still put their money in banks is for liquidity and safekeeping. Take away the insurance and they'd probably just invest them all elsewhere and hide some in vaults at home.

Oh wait, only savings in banks are not taxed, right? Money kept at home and those in other investments are taxable. Sneaky, sneaky.

bituperio

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Have you read anything about this? It seems that the European Central Bank is playing with the idea of no longer protecting deposits. Do you think it will happen? Do you think bitcoin and alts will moon even more?

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