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This was an EU country with a bank deposit guarantee similar to the FDIC guarantee. The guarantee is being voided. How many more EU bank deposit guarantees are
by MaysonL 14y ago
This was an EU country with a bank deposit guarantee similar to the FDIC guarantee. The guarantee is being voided. How many more EU bank deposit guarantees are untrustworthy? How many depositors will choose to no longer trust them? How many banks will be run?
Personally, I don't have a clue as to the answers to those questions, and I doubt that those who are imposing this tax have a clue, either.
- justincormack 14y agoDeposit guarantees were designed for one off failures of smallish banks, not systemic debt crises where large proportions of the total debt in a country is worthless. None are trustworthy in this sense, but some countries are worse off than others. Cyprus has a bankrupt government with no access to debt.
- caf 14y agoThis is absolutely true - the deposit guarantee schemes are not a bottomless pit of money, and are nowhere near able to absorb the losses of a widespread series of cascading bank failures. It seems extremely unwise to publicise this fact, however - which is what this measure does.