What can we learn from Cyprus? A new bailout method is replacing the unpopular taxpayer grab that has worked well up until now.
European finance ministers have come up with a plan to divide banks into “good” and “bad” (perhaps they draw straws, or roll dice) and salvage the one by shifting the deposits and liquid assets to the first while loading all the toxic debt onto the other. In a bold move to secure a prosperous future, 60% of the deposits over 100,000 euros will be collected in a one-time savings tax called the “Mandatory Stabilization Contribution” (MSC).
It’s too bad that ordinary Canadians can’t get ahead of the curve somehow, and begin to move all of their savings and make all of their deposits into a local Credit Union account, removed from the stormy uncertainty of the teetering global economy. That way, when the Federal Reserve of the United States finally allows interest rates to rise, (causing an eruption of hyper-inflation and the inevitable tsunami of bankruptcies and lay-offs, leaving behind the desolation of crushed stock markets around the world), we can breathe a sigh of relief and continue on a local scale of commerce.
When our elected representatives start pounding on their desks and vote unanimously to bring in the MSC as the salvation for our precious charter banks, we can politely shake our heads, herd these ravenous dinosaurs together and cheer as they stampede into the pages of history.