3 ms·
No. We'll see some bank runs mostly in southern countries, but the deposits are power law distributed and thus the financial majority (in sum, not in numbers of
by jk4930 14y ago
No. We'll see some bank runs mostly in southern countries, but the deposits are power law distributed and thus the financial majority (in sum, not in numbers of accounts) will probably act more rational than members of the frightened, over-emotional masses that withdraw their 5-10K or so. The rational will transfer their accounts to more stable banks, e.g., in Germany and won't put their money under the mattress.
Of course, it's a bit dirty to grab the money from those <100K too, it destroys trust, no question. But the essential players and movers were protected, that's why we created this small injustice (yes small, compared to what's possible).
- mikecane 14y ago>>>The rational will transfer their accounts to more stable banks, e.g., in Germany Ah, so Cyprus will just collapse on its own then without any repercussions elsewhere? I don't think so.
- jk4930 14y agoCyprus won't collapse (and even if, that's not the end, they'll stand up again and as an EU member state they'll receive help as they did before). Their banking sector is overblown and the intention is to reduce it to EU average by 2018. They tried to copy Luxembourg, but screwed it up. Now they have to come up with something different. Anyway, that's far away from your "death spiral of the entire worldwide financial system." :)
- mikecane 14y ago>>>Anyway, that's far away from your "death spiral of the entire worldwide financial system." :) We'll see. Bank accounts are private property. This is an unprecedented confiscation. And if this happens without open rebellion, nothing is safe for anyone anywhere.