As Greek banks have become more and more risky, we have learned that Greek citizens have been moving more and more of their hard-earned cash to the safe haven of Switzerland. Makes sense, why keep your money in a financial system tettering on the edge?
Financial blogger Bruce Krasting picked up on possible new regulations the EU is considering as part of the effort to save Greece from default:
[The Greeks have] moved billions of Euros to Swiss banks in an effort to preserve their wealth. In the process they have crippled the Greek banks and have added to the downward spiral in Greece and the rest of the EU.
There was (IMHO) a very significant development on this front last week. A move is being made in Brussels to “force” the Swiss government/banks to transfer all of the assets of Greek citizens back to the Greek banks. For a Greek this means that your money is hostage. It has been functionally expropriated. It will be transferred into a banking system that is fraught with risk. Some portion of the money that goes back to Greece will certainly be lost.
I have talked with some who I know in Athens. They are out of their minds with this development.
Read it all, as Bruce analyzes the possible consequences should the regulations become law. I agree with all he foresees, but am also concerned with the horrible precedent such legislation would create. Precedent that may, one day, be seen as perfectly acceptable by our own elected servants.
And that would be a very bad thing indeed.