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 Post subject: A short history of bank deposit levies
PostPosted: Tue Mar 19, 2013 8:47 pm 
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A short history of bank deposit levies - Tyler Cowen -> http://marginalrevolution.com/marginalr ... evies.html

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In July 1992 Italy’s Socialist Prime Minister Giuliano Amato imposed a one-off levy on bank accounts. It was a mere 0.6% in comparison with Cyprus’s scheme, and it still left a lasting scar on the country’s financial psyche. In 1936 Norway experimented with a bank deposit tax, but it caused an exodus of cash from the country. There are also some Latin American examples (Brazil in 1992, Argentina at the turn of the millennium) but most were combined with capital controls, and were last-ditch efforts to rescue the financial system when all else had already been tried.

That is from Edmund Conway, here is more. From Carola Binder, here is a history of capital levies in fiscal crises, and via Google here is what Hungary did in 1920.

there is more


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 Post subject: Re: A short history of bank deposit levies
PostPosted: Tue Mar 19, 2013 10:53 pm 
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Thanks for that, interesting reading.


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 Post subject: Re: A short history of bank deposit levies
PostPosted: Wed Mar 20, 2013 9:14 pm 
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There is also another precedent to Cyprus - MF Global


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 Post subject: Re: A short history of bank deposit levies
PostPosted: Thu Mar 21, 2013 5:59 pm 
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Deposit guarantees only protect against bankruptcy, not levies, says EU - -> http://www.ekathimerini.com/4dcgi/_w_ar ... 013_488598

Quote:
Guarantees on deposits in the European Union are only there if a bank completely collapses, and does not protect from fiscal steps decided by parliaments, the European Commission said on Tuesday, defending a decision to impose a levy in Cyprus.

The euro zone's demand at the weekend that Cyprus place the levy on bank accounts as part of an emergence financial rescue has created a backlash in Cyprus and prompted many Europeans to accuse Brussels of disrespect for its own rules.

EU law guarantees deposits up to 100,000 euros per customer, per bank. But Commission spokesman Simon O'Connor said those guarantees only existed: «in the event of a bank failure."

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ESM should be temporary backstop for bank resolution -ECB's Knot -> http://www.reuters.com/article/2013/03/ ... 0V20130319

Quote:
"We need a credible backstop and for that you need the ESM definitely in the early years," Knot said.
He also said bank share- and bondholders should play a stronger role in bailouts in future, saying "bail-in should be the new norm".

there is more


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