Banking Restrictions - Examples -

[Spartacus]

Re: Banking Restrictions - Examples -

Things are great, man. Why worry?

Until the cops crush your skull with rosewood and cherry batons your concerns are trivial.
And doing anything now to prevent that is just waste, since things are so good right now. Don't do anything about it until it gets a lot worse.

Just play that old Bobby McFerrin song again and again and again.
</snicker>

lukester, i don't conceive of myself as at any barricades. my image is closer to a picture of a small rodent-like mammal looking
to survive while the soon-to-be-extinct giant saurians battle, unaware of the approaching comet that is about to transform the ecology.

[dbarberic]

Re: Banking Restrictions - Examples -

Wow... this really got off topic...

So much for specific examples.

[Tulpen]

Re: Banking Restrictions - Examples -

Perhaps I am a bit slow on the uptick here but are some trying to suggest here that the liquidity of banks depend mostly on retail deposits in checking and savings accounts?

[Guest]

Re: Banking Restrictions - Examples -

Tulpen --

I don't know what others were referring to, but I was referring to currency controls. That means at some point cash money is "rounded up" or "blocked" here to prevent wholesale capital flight. They clamp down via high tax imposition on any funds moving out of the country, and potentially place "windfall" tax status on the sale of bullion to discourage hoarding of hard money - or they can insert all kinds of small bits of legislation to take a bite out of all attempts to shelter cash domestically from steepening devaluation.

Americans may find this idea more or less plausible, but actually it did exist in various EU countries in past decades fairly often, and is considered quite normal in more heavy handed administrations of countries where government is ceded more powers over people's personal money (and a lot of EU nations fit that description and make America still look moderately freer in it's capital controls, but you may not find some people here Stateside who recognize that fact). Regardless, the US will soon go the way of the EU, and probably exceed the EU in currency controls as we have potentially as big or much bigger problems looming.

Varying forms of currency controls were commonplace in the world only 20 years ago and can still be found in lots of countries, so I consider it "quite likely" that some forms of this will be implemented in the US soon enough.

That's tough to swallow when potentially 50% of your savings are at threat of being confiscated anyway by currency abuse. I don't anything about all that business that was swirling with rumors about how money market funds are hopelessly compromised with CDO paper. That sounds more temporary. And I do fully take the point several people have made, that the abating public fears of bank runs, or "not being able to get your money out" is not a very convincing fear to indulge because the CB's top priority will be to issue sufficient fresh cash money to squelch that eventuality quickly. That is one thing they can be expected to try to do aggressively.

But the "corral-ing of highly inflation prone money" is something with a quite high probability. When currencies become chronically weak the tendency to capital flight has historically been entirely predictable, and this will be true equally for typically insular America. The fact such large pools of money exist in this country will only make the trend, and the government countermeasures, more of a headline topic in the news eventually.

[Tulpen]

Re: Banking Restrictions - Examples -

I see, and good points.

Excellent writing by the way Lukester!

[dbarberic]

Re: Banking Restrictions - Examples -

New example to ponder:

Citibank limits ATM cash in city
http://www.nydailynews.com/money/200...in_city-2.html

BY KERRY BURKE and LARRY McSHANE
DAILY NEWS STAFF WRITERS
Thursday, January 3rd 2008, 4:00 AM

A jump in ATM fraud led Citibank to slash the maximum amount of cash available to customers from their accounts - a security move greeted warily Wednesday by its patrons.

The new cap on cash kicked out by the company's ATMs began in mid-December after what Citibank called "isolated fraudulent activity" around the city.

The bank, with 134 branches around town, would not say how many customers were affected or how much money was involved.

One Brooklyn woman said she went to her bank branch on Christmas Eve and was unable to take out her normal cash limit, so she called customer assistance. "She told me customer accounts had been hacked into through cash machines around the city," the woman said.
"As a result, the bank had decided to slash how much customers could withdraw from their own accounts. They cut my amount in half.

..... (more if you follow link)

Fraud prevention.... right? Never heard of this before.

[sadsack]

Re: Banking Restrictions - Examples -

New example to ponder:

Citibank limits ATM cash in city
http://www.nydailynews.com/money/200...in_city-2.html


Fraud prevention.... right? Never heard of this before.

Banks have a lot more to lose since Regulation E came into force. If a depositor claims a discrepancy, the bank is compelled to issue a refund of the discrepancy until it can complete its investigation.

Of course, the rights of a depositor under Reg E are only preserved if written notification (preferably CMRR) is given to the financial institution.

Nevertheless, the very real risk of having to issue massive numbers of refunds (though greatly mitigated by depositors' ignorance of their rights) supplies a plausible motive behind the ATM restrictions. I don't believe, however, that "Fraud Prevention" is the ultimate reason - more likely it is "Loss Mitigation."

[jmdpet]

Re: Banking Restrictions - Examples -

My example, for what it's worth. A few days ago I went to withdraw $5,000 from a Wachovia account (which I never use). The teller had to call "for approval", which he received after being on hold for about 5 minutes.

I thought it was annoying to have to wait for approval to withdraw _my_ money. When I asked what threshold triggered the need to ask for approval, I did not get a straight answer. "It depends..."

[grapejelly]

Re: Banking Restrictions - Examples -

I have all cash in Schwab brokerage account...because at least the money is sorta there, allocated for me, and not loaned out. I keep it in an all-US TREASURY SECURITY fund (NOT all government paper).