Was rhetoric always like that, or are people stretching their points harder nowadays?
For example: Monday "can be confiscated at whim, frozen by any banker at any point in time". Oh really? Any banker can confiscate any customer's money on a whim?
There's more. I find it very annoying.
"How many Greeks do you think had insurance on their bank accounts? All of them. What happened to that? Poof, in one afternoon. Vanished. 20% haircut." He makes it sound as if deposit insurance is supposed to insure against a tax claim by the state (in this case a rather sudden, surprising tax).
It's admirable, in a way, how some people manage to make weird things sound reasonable.
You're negating your own point. The "claim by the state" was the justification used to confiscate the money. The confiscation was demanded by bankers, and the state was acting as their enforcer.
There are other examples. Such as the foreclosure mills set up around 2008 which literally stole some people's houses - even if they didn't have a mortgage.
And in the UK the banks make a lot of their profits from excessive "overdraft fees", which they claim - on a whim, just because they can - unless legislation is passed to prevent them.
And in times of financial stress, banks have the option to prevent withdrawals of customer funds. That's not a permanent confiscation, but it's a very bad thing if you need to buy food and have no idea why your card isn't working.
These can all be fought through the courts, but most individuals have neither the time nor the resources to fight them.
The bottom line is that banks like an unofficial branch of government. From the Fed down, they control the money supply - and since there is no such thing as "money" in any tangible sense that isn't symbolic of political power, that's identical to being able to exercise immense power over people's lives with no political accountability.
No, banks do not have the legal right to withhold a customer's funds with an account freeze if they don't have a warrant signed by a judge. It's still "your money" on loan to the bank. The silliness of being scared of a big-bad bank needs to end.
If a bank does this to you, you call up (in the USA) the OCC (Office of the Comptroller of the Currency). They do a check on you to make sure no law enforcement agency considers you a terrorist. Once cleared, they tell the bank to release the funds. No court needed. This literally happened to me after depositing a check for my business.
I agree, banks, especially the top 5, can be cunts. But don't go all tin foil hat about it. Don't watch 10 minute youtube cartoons about "how money really works because the lizard Illuminati actually control it". It's bad for your mental health.
Is there a time delay where the OCC can't in fact make them release funds? Several major banks have deposit limits of 5-days or even 30-days for funds inside of a new bank account to prevent check fraud.
From what I understand, most verifications are done because the OCC regulated them to do so. Maybe an agency here and there added other stuff. But at the end, the OCC is the one who knocks if a bank fucks up on information due diligence.
But 30 day is still beyond me as to where that comes from. 3 to 5 day. Sure. But 30 makes zero sense. My situation was a bit unique due to the account being frozen out of the blue.
I'll bite once more. I'm not negating my own point. First, a digression.
I can't read Greek and haven't read that particular insurance policy's scope. But I've read all of mine, and they all say "insures against <list> and only that". They don't insure me against generic other mishaps, and exclude force majeure.
If the legislature decides to expropriate all or part of someone's property, that act doesn't extend the list of protections afforded by an insurance policy. Perhaps the legislature shouldn't have done what it did, I'm not arguing that point. But a legislature is sovereign, it can do things.
If a bank or someone else tricks, cajoles, persuades the legislature to expropriate all or part of someone's property, that act still doesn't extend the list of protections afforded by any insurance policies.
That they banks could have done other things instead of going to the legislature is entirely correct, but not relevant. Once the legislature acted, the thing that actually happened was out of scope for the deposit insurance, because the legislature's sovereignty is a unique force.
And after that digression, my point is that the original article bends the truth too much. In this case by making it sounds as if an insurance policy was worthless ("poof") because it didn't protect citizen against expropriation ordered by the legislature of the citizens' country, without arguing that what happened was in-scope for that insurance.
He didn't argue either that the legislature was acting beyond its powers, or that the insurance policy covered the what happened. He could have argued, but didn't, he just put words next to other words. The words are spatial connected, not causally, and my point is that that's ugly and misleading.
It sucks for the Greek who lost part of their deposit, but that doesn't license anyone to be bend the truth about what a particular insurance covers.
>Any banker can confiscate any customer's money on a whim?
That's the point behind the OCC (Office of the Comptroller of the Currency). They're to make sure that does not happen. Broad brush stroke, SEC for the banks. Chase bank actually tried this on me after depositing a check from a client. They wanted to hold the check for 31 days and they froze my account (which included my payroll and day to day funds). Granted, it was a big check and the biggest one I ever got by a large amount. But verification of legality for that amount was only supposed to be about 3 days (which I don't have problems with). Anyways, did about 5 minutes of extreme panic research and discovered the OCC. Literally that easy to find. Called them up, explained the situation and they said they need to do their due diligence with my info. 2 days later (they researched the payment, fyi I was sub-sub-contract on a gov job) they scheduled a call between me and Chase bank at a branch. They forced the funds released and account back in working order. Chase gave me a huge apology. I literally told them to shove their apology in their ass and to cash out my company's account so I could open a new one elsewhere. They claimed they can't cash out in such short notice, the guy from the OCC on speakerphone speaks for me and goes "Your office has 30 minutes to figure it out."
Literally, my favorite gov agency since I did feel pretty baller going against Chase bank. The Chase branch had 2 lawyers and a regional vp with their branch manager waiting for me. I think the CFPB got involved too, on my side, but OCC took lead. At least the guy I always talked to was OCC. I was just surprised how fast acting these people were. From account freeze to walking out was only 3 days.
Makes me wonder though, what other agencies are out there, that baller, that protects the public?
Now Greece, sure. Not like they truly have a functioning government to begin with.
Often it's neither whim nor regulations, but simply bureaucracy. Mistakes happen.
Cryptocurrency advocates promise you freedom from everyone else's action, but at the cost of no way to correct mistakes. So if your computer security is ever 100% less than perfect, or you're defrauded by your counterparty, there's no way to recover the loss. (Well, there's legal action, but "freedom from legal action" is also cited as a benefit..)
I was about to argue that cash is just as susceptible to "theft". But then you brought up the freedom from legal action. That's a good point. At least with my dirty-dirty fiat dollars, you rob from me, my "forcefully taken money" (taxes) funds a group of people that will at least go after that person. Obviously, that's not a guarantee. But it's better than a system where it sums up to "Yea, sucks for you. We don't believe in legal action of any form and built it up in a way where you're screwed."
No often it is at a whim of an individual. For instance, as the system is based upon trust and not security, I can transfer $10,000 from your account to mine. There are dark markets where you can do this at a 5% rate.
You can dispute the charge, and an individual will decide whether it is valid or not. That decision, as the author put it, is based upon the relative privilege of the two parties. If I am a weird kid on the internet, the bank will always give you your money back. But what if I am a utility or a city government? You will almost always lose your money without months of beurocracy or legal work. In fact, they don't even have to take it from your bank account. They can merely send you a sheet of paper which says you owe them, and your credit rating (money privilege) will rapidly erode if you disagree with their assessment.
It is not even about crime or errors all of the time either. Have you ever tried to buy a car from a private party on a Sunday? Even with $1M in the bank, you have no access to your money due to arbitrary decisions of local bank branch managers. Buy from a privilleged seller (dealer)? No problem. In fact, they can invent the money with which you purchase it (assuming you are privilleged enough, of course)
Well, my wife was suddenly and unexpectedly locked out of her money for a day just because someone in a local branch fucked up. It's good that it's rare, and as long as the economy is stable in your country you can trust that - but the "as long as" here is the worrying point.
Australia. Yes, there was a line. It was lodged as a fraud reversal charge due to them having another customer account hacked. Payment was made for a sale and cleared from that account. Since it was interbank, they decided to help themselves to the cleared payment, despite my asset already having been sold.
I think he's mistaken Cyprus for Greece. I can't find reference to Greece having a "bail-in". As far as I know the only place it happened in the Euro banking crisis was Cyprus. If I'm reading the correct bit of wikipedia:
> "Remaining good assets and deposits below €100,000 with Laiki Bank would be saved and transferred to Bank of Cyprus (BoC), while shareholder capital would be written off, and the uninsured deposits above €100,000 – along with other creditor claims – would be lost to the degree being decided by how much the receivership subsequently can recover from liquidation of the remaining bad assets. As an extra safety measure, uninsured deposits above €100,000 in BoC will also remain frozen until a recapitalisation has been implemented (with a possible imposed haircut if this is later deemed needed to reach the requirement for a 9% tier 1 capital ratio)"
It was not a tax by the state. It was the other way round: it was the refusal (or rather inability) of the state to act as lender of last resort and cover a private company (in this case a bank) which had gone insolvent.
The average Cypriot, not having €100k in their bank account, was not affected. Some local business owners were. The majority of victims were those using Cyprus as a tax haven due to its low corporation tax rate: https://www.taxjustice.net/2017/10/26/21561/
It wasnt a tax. Deposits in euro countries were/are insured up to 100k. Those accounts were not affected, the bank bail in affected amounts beyond that
Confiscated a whim? Not really in western countries
Frozen at whim? Why yes, many countries implement capital controls.
For example: Monday "can be confiscated at whim, frozen by any banker at any point in time". Oh really? Any banker can confiscate any customer's money on a whim?
There's more. I find it very annoying.
"How many Greeks do you think had insurance on their bank accounts? All of them. What happened to that? Poof, in one afternoon. Vanished. 20% haircut." He makes it sound as if deposit insurance is supposed to insure against a tax claim by the state (in this case a rather sudden, surprising tax).
It's admirable, in a way, how some people manage to make weird things sound reasonable.