Millennium bank question

Hi guys, so I have an account with Millennium bank in Poland and I just had a quick question. I know Millennium bank is originally Portuguese and we know their economic situation, things aren't looking so good for them. So with the situation in Cyprus with the proposed "haircut" bailout which didn't go through of course, but if they ever did want to do something like that in Portugal and it did go through, would they be able to take money from my Millennium bank account in Poland or is it a separate branch with no affiliation to the Portuguese branch?

No they couldn't: it is an entirely separate company.

According to the latest news banks are still closed in Cy, they are going cap in hand to the Russians to bail them out. There is no foregone conclusion to the standoff, it can go either way.

All EU banks accounts are informed to be guaranteed up to 100,000 Euro, if they can withdraw money from CY private bank accounts on the pretext of forcefully making private people buy shares they did not agree to. It begs the question who is next...


All those people who have had their bank accounts frozen in CY, would have said exactly the same last friday. If this move goes through H, it changes the dynamics of European banking, anything is possible. N.Z is also proposing a similar measure now, N.Z was voted the safest country to do business in last year.

One thing that does not change is national self-interest: putting it very basically, the government of Poland would not allow the government of Portugal to help itself to individual bank accounts in Poland.

Do you recall the situation a few years ago with Pekao S.A and WBK. The talk of the Italians and Irish emptying the coffers of the Polish subsidiaries to directly recapitalize the parent company. Created a run on both banks, now I would not be pulling all my PLN out of my accounts personally, although if the CY levy goes through I will not hold 100% of my funds in Europe.

Wasn't that a case of 'taking all the profits out'? There is no way that any Polish government is going to let the Portuguese govt take money from individual Polish accounts: doing that would be electoral suicide.

I believe it was taking the reserves.

If the CY levy goes through and it is still on the fence, depositors all over Europe are going to be spooked and right so, as it is a change of direction. In essence that means Brussels have power over all of our accounts to do what they consider necessary. Personally I hope the levy fails and an alternative is found. Hindsight is always 20/20 the one thing for sure in march 2013, Greece should have been allowed to go bankrupt and kicked out of the Euro.

You misunderstand the situation. The Cypriot banking system cannot protect its depositors and the EU is offering help but only 2/3rd of the money. Cyprus must get the rest, which they need to cover deposits over 100k (which are not subject to a guarantee).

Cyprus wants to protect the foreign depositors who are mainly Russia as the Cypriot economy depends on it. Using EU money to bail out Russians is no within its remit.

EU laws says a country should have a depositor protection scheme, however it is no guarantee that it can pay the 100k euro. The Icelandic precedent is that a country can simply refuse to pay out if the situation warrants it.

Iceland seized 100% of foreign deposits in 2008 and the EU accepted that it was necessary.

So, any country can seized depositors money and refuse to honour the guarantee. It is NOT the EU who is doing this.

I believe you misunderstand the situation peterweg, two of the main banking groups in CY are on the verge of bankruptcy Bank of Cyprus group, Marafin popular and Marfin Laiki Bank. Most of the other banks in CY are in good fiscal order or they were until last friday.


Correct


Iceland is mot in the EU , so that case is irrelevant .

Iceland is part of the EEA and EFTA with is fully complaint with all EU financial laws. Their banking system has to comply with EU requirements and the failure to repay non-Icelandic depositors resulted in them being taken to court by the EFTA Surveillance Authority

eftasurv.int/about-the-authority/the-authority-at-a-glance-

EU law was applied in the case against Iceland and Iceland's argument was accepted
en.wikipedia.org/wiki/EFTA_Surveillance_Authority_v_Iceland

Even though its violates the founding principles of the EU (equal treatment of all EU citizens regardless of nationality and free movement of capital).


If these two banks fail the entire banking system will collapse due to capital outflow and a lack of depositor guarantee, same as Iceland's banking system, one bad bank two down several other that were 'healthy'.


eftasurv.int/internal-market-affairs/articles/nr/1646

The judgement: eftacourt.int/images/uploads/16_11_Judgment.pdf

It can be summed up by this


If a country doesn't have the money, EU laws count for nothing.

The smart way would have been to find a buyer for the banks.

What the EU are doing here guarantees that there will be disastrous runs on banks and money market funds when we have another financial crisis - which we will, since authorities today really don't know what they are doing on the economic front. Another example of that here: while hitting depositors, EU leaves bondholders whole. Why?

The Cyprus move is portrayed as a way to recapitalize that island's shaky banks. But stealing deposits guarantees banks' failures as soon as their doors re-open - if they ever do. After all, the Cypriot government may reject their agreement with the European Commission, European Central Bank and the IMF out of fear of both

apoplectic voters and angry Russian depositors. Make no mistake, this deal is about as voluntary as those famous gangster words, "We have an offer you can't refuse."

So what in the world were the Germans et al thinking? Berlin is obviously fatigued about being the paymaster for its feckless friends to the south. But anyone with half a brain would know that this is not the time to suddenly change course. In September 2008, Treasury Chief Hank Paulson had a German-like moment. He had already approved the bailout of creditors of Bear Stearns and the bondholders of Fannie Mae and Freddie Mac. Enough is enough, he harrumphed and decided to let Lehman Brothers go down. Instead of being applauded for belated rectitude, Paulson's move precipitated the first financial panic the U.S. in 75 years. Hardly had the ink dried on Paulson's decree about Lehman than he was nationalizing AIG, and Uncle Sam was throwing out multi-trillion dollar guarantees to money funds and numerous other entities.

The poor judgment of the political and economical leadership of the West today rivals that of their predecessors of the 1930s and 1970s. Under their misguided policies the wealth-creating private sector is continually squeezed with growth-killing taxes and regulations and the power of Big Government expands. Most countries have made, at best, small reforms when big ones - especially on the tax cutting front - are needed.

Perhaps ways will be found to prevent the mishandled Cyprus situation from triggering a full-blown crisis for now. But only for now.

wow didn't expect to stir up a big discussion. good information here though. thanks for the help guys :)

They could depending on a deal between banks, so you better make inquiries.