If the banks cannot be encouraged to offer low-fee accounts for young and lower-income customers, the government might consider creating postal savings accounts for small savers.
However, an insider account of the Brussels negotiations from the Wall Street Journal muddied the waters further by suggesting that the idea of the levy for small savers was first put forward by the Economic Affairs Commissioner in Brussels, Olli Rehn.
The traders are not providing long-term capital, they could not care less about the relative merits of the companies concerned and they do not provide a vehicle for small savers.What they do provide, the defenders of the industry will argue, is liqudiity.
During the coming days, she or her representatives will have to broker a compromise that prevents the banks in Cyprus from collapsing, reduces the levies on deposits (particularly for small savers), and elicits contributions toward the cost of the bailout in other ways — quite likely ones that punish offshore depositors, the Russians included, even more.
Banks around the world generally can't afford the maintenance costs to serve low-income people and aren't incentivized to design products for small savers.
The startup generates returns for small-scale savers (primarily) through investment in Nigerian government securities, such as bonds and treasury bills.
The levy would have taken 6.75% from small savers and 9.9% from larger investors and caused widespread anger among ordinary savers.
It's only for relatively small savers, because $250,000 is not big time, a lot of money.
In both cases, runs on the banking system ended up with a partial freezing of bank deposits, which in the case of Argentina, triggered a full-fledged banking crisis and a subsequent conversion of deposits denominated in a foreign currency into domestic currency that led to a restructuring of domestic liabilities -- at a high cost for small domestic savers.
July 11 , 2012While Meg's boss, Nouriel Roubini, has slammed Spain for inflicting losses on its small savers (see 7.52am for details).
