Friday, March 29, 2013

Links 29 March, 2013

I thought that hundred thousand euros was lot of money to put in a bank. Today Age has a story about a Cypriot_Australian who worked in Australia for over thirty years, retired to Cyprus in 2007 with his life savings of a million Australian dollars, deposited in Laiki Bank and has been living on the interest.

Meanwhile, some of those who took advantage of tax shelters seem to be doing fine. WSJ has an article 'Wealth Over The Edge: Singapore' "But over the past decade, Singapore has undergone a dramatic makeover, as the rich and famous from Asia and beyond debark on its shores in search of a glamorous new home—and one of the safest places to park their wealth." Akshay Regulagedda who linked it on Facebook mentions that an Indian cabinet minister goes there for a haircut every two months.

One problem seems to be banks too big in comparison to a country's GDP. From an article coming from a German Foundation "For the Germans, the Cypriot saga played into political tropes about moral hazard and free-riding tax havens. One German public intellectual described Cyprus in the Financial Times as a "cesspool of profligacy and haven for tax-dodging Russian oligarchs." German media are providing detailed analyses of other tax havens to which their countrymen might be exposed. The daily Die Welt declared recently that the tax haven as an economic model has been "exhausted." Luxembourg, with a financial sector more than five times the size of its €44 billion GDP has come under particular scrutiny. With a financial sector twice the size of its GDP, the United Kingdon could also become a point of interest."

In The Debate on Bank Size Over "What really moves the needle in terms of consensus among policy makers and the broader public opinion is when events combine with a new understanding of how the world works. Thanks to Senator Sherrod Brown, Democrat of Ohio; Senator Warren, Democrat of Massachusetts, and many other people who have worked hard over the last four years, we are ready to understand what finally defeated the argument that bank size does not matter: Cyprus."
Nothing will happen soon says The Atlantic And there are the problems that Holder mentioned

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