The Financial Times has reported that Greece plans to raid Greek bank deposits to deal with its financial crisis:
Greek banks are preparing contingency plans for a possible “bail-in” of depositors amid fears the country is heading for financial collapse, bankers and businesspeople with knowledge of the measures said on Friday.
The plans, which call for a “haircut” of at least 30 per cent on deposits above €8,000, sketch out an increasingly likely scenario for at least one bank, the sources said.
A Greek bail-in could resemble the rescue plan agreed by Cyprus in 2013, when customers’ funds were seized to shore up the banks, with a haircut imposed on uninsured deposits over €100,000.
But relax, silly depositors in Greek banks! Greek officials have told Reuters that any such reports are “baseless”:
The head of Greece’s Bank Association on Friday dismissed as “completely baseless” a report by the Financial Times that contingency plans were being made for a possible bail-in on bank deposits.
Louka Katseli, who also chairs the National Bank of Greece , told Skai TV that suggestions authorities were planning a raid on deposits belonged “only in the sphere of fantasy.”
“There are no such scenarios at any Greek bank, not even as an exercise on paper,” Katseli said.
Are you having a sense of deja vu? If so, here’s why:
On March 1, 2013, Cyprus officials told Reuters they ruled out seizing bank deposits:
Cyprus’s new finance minister on Friday ruled out a haircut, or imposed losses, on bank deposits to ease a financial bailout from international lenders, now stalled amid worries about debt sustainability.
“Really and categorically – and this doesn’t only apply in the case of Cyprus but for the world over and the euro zone – there really couldn’t be a more stupid idea,” Michael Sarris, who took over his post on Friday, told reporters.
By the end of that same month, Cyprus had stolen 60% of bank deposits over 100,000 Euros.
Governments will steal your money if they want to.
But it could never happen here.