Europe

Cyprus lifts almost all domestic capital controls

"Cyprus has reached another milestone in getting rid of capital controls it put in place after being bailed out last year, saying all domestic controls have been lifted except the opening of new bank accounts. The Finance Ministry said in a statement Friday that a prohibition on cashing checks as well as caps on domestic transactions and payments that don't require central bank vetting have now been removed. However, restrictions on unfettered money transfers abroad remain in place. Authorities said they hope to lift them by year's end. Authorities imposed restrictions to prevent a run after international creditors last year forced the seizure of uninsured deposits in its two largest lenders." Continue reading →

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“Everything we are told about deflation is a lie”

"Messrs Yellen, Draghi et al should be careful what they wish for. Inflation targeting is hardly a precise science. Achieving an entirely arbitrary 2% inflation level is bad enough for savers on fixed incomes when deposit rates are close enough to zero as to make no difference, but markets have a tendency to overshoot. Most government bond markets are clearly overbought – but in a QE world given fresh impetus by the looming arrival of the ECB, overbought markets can become even more overbought. When we don’t claim to understand the underlying dynamics (political) or the final destination (though we have our own fears), it’s much better simply not to play." Continue reading →

Continue Reading“Everything we are told about deflation is a lie”

European central banks mull bolder moves to prevent low inflation

"Asked what tools the ECB has remaining, Mr. Liikanen, who has headed Finland’s central bank since 2004 and is on the ECB’s 24-member governing council, cited a negative deposit rate as well as additional loans to banks and asset purchases. Bundesbank President Jens Weidmann didn’t rule out large-scale asset purchases, known as quantitative easing. Mr. Liikanen also said it was an option for the ECB and wouldn’t run afoul of rules prohibiting the central bank from financing governments. The Federal Reserve and Bank of Japan have aggressively used the policy to keep inflation from falling too low." Continue reading →

Continue ReadingEuropean central banks mull bolder moves to prevent low inflation

Cyprus abolishes maximum daily cash withdrawal limits

"In a decree issued by the finance ministry, the 300 euro limit per person per day was scrapped, along with restrictions on breaking fixed-interest time deposits prior to maturity. The decree also allowed, under conditions, individuals to open bank accounts in other credit institutions. Restrictions remain on moving money abroad. Cypriot officials have previously said they anticipate that all controls could be fully lifted by the end of 2014. Cyprus was forced to wind down a major bank and convert large deposits in a second to recapitalise it in order to qualify for aid from the International Monetary Fund and the European Commission." Continue reading →

Continue ReadingCyprus abolishes maximum daily cash withdrawal limits

UK tax office to get power to raid bank accounts without court order

"At the moment, if HMRC want to seize your property or cash, they have to take you to court, win and then get a court order. Now, after a couple of warning letters and a phone call, they apparently can do it at the flick of a switch. Crucially, there’s no safeguard built into this system – where's the appeal process? To repeat, if HMRC decide you owe them cash, they just take it. If you haven't managed to reach agreement with them, then you'll just wake up one morning, check your bank account, and find the money's gone. We're told that 'a minimum of £5,000 will be left across debtors’ accounts.' That’s a very low threshold – especially for a business or a pensioner." Continue reading →

Continue ReadingUK tax office to get power to raid bank accounts without court order

Europol: Police need powers to tackle virtual money laundering

"The head of the European Union's policing agency warned on Monday that virtual currencies such as Bitcoin were being used for money laundering and called for police to be given more powers to identify criminal suspects operating on the Internet. 'We're seeing that virtual currencies are being used as an instrument to facilitate crime, particularly in regard to the laundering of illicit profits,' said Europol head Rob Wainwright, speaking on the margins of a nuclear security conference in The Hague. Wainwright said police should be given new powers to allow them to identify anonymous participants online and bring them to justice." Continue reading →

Continue ReadingEuropol: Police need powers to tackle virtual money laundering

Bitcoin ATM Company Refused Account by Bank of Ireland

"Ireland’s first bitcoin ATM company suffered a setback yesterday as the Bank of Ireland rejected their application for a bank account. Dolan clarified: '[The bank] informed me that: ‘Your account application has been rejected due to the nature of your business. We’re not comfortable with it.’' Dolan says their business advisor at the Bank of Ireland claimed instructions came from on high." Continue reading →

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Cyprus Central Bank Governor resigns with $250K golden parachute

"One of the main criticisms directed against Demetriades has been how, under his watch, the now defunct Laiki Bank accumulated around €9.5 billion in emergency liquidity aid, only to buckle and fail when the ECB threatened to pull assistance. 'How much independence can a central banker have when, from his statements, it appears he was serving other expediencies instead of his country’s interest,' President Nicos Anastasiades said last year. For the state to get its €10 billion in bailout funds last March, the president said, it was told to privatise state companies, seize deposits, make painful cuts, and raise taxes." Continue reading →

Continue ReadingCyprus Central Bank Governor resigns with $250K golden parachute

Bit of Headache for Paris, Bitcoin Regulation Added to EU Agenda

"On 04 March 2014, Pierre Moscovici urged EU member states to begin talks regarding the regulation of virtual currencies. As it currently stands, bitcoin is considered 'neither a legal currency, nor a means of payment …[and]… does not fall directly within the scope of supervision and surveillance of competent authorities in payment issues', according to the Bank of France. The same can be said for the European Central Bank, who mirror these findings and also added that virtual currencies. Where publications choose to highlight negative issues, without giving fair exposure to the positive issues, it is no surprise to see the concerned authorities call for regulatory measures." Continue reading →

Continue ReadingBit of Headache for Paris, Bitcoin Regulation Added to EU Agenda

Pensions in Ukraine to be halved: sequestration draft

"The self-proclaimed government in Kiev is reportedly planning to cut pensions by 50 percent as part of unprecedented austerity measures to save Ukraine from default. With an 'empty treasury', reduction of payments might take place in March. Ukraine’s new prime minister, Arseny Yatsenyuk, promised the government would do its best to avoid a default, adding that he expects an EU/IMF economic stabilization package soon. The European Commission offered Ukraine an 11 billion euro loan if Kiev agrees a deal with the IMF. Accepting IMF money will mean many sacrifices for Ukraine’s economy, [such as] increased gas bills, frozen government salaries, and all around budget cuts." Continue reading →

Continue ReadingPensions in Ukraine to be halved: sequestration draft