Cyprus: We apologise for any inconvenience...
As depositors in Cyprus face large losses on their savings, Colm O'Regan wonders how the banks are going to talk their way out of this tricky situation.
In the world of online banking customer service messages, it's probably the mother of all "We apologise for any inconvenience caused" statements.
The internet banking site for Cyprus' Laiki was not undergoing essential maintenance or experiencing heavy traffic. At the time of writing, it was on a bank holiday "on the grounds of public interest to ensure financial stability."
Meanwhile over on the Bank of Cyprus's website they were still sunnily trumpeting the benefits of their mobile technology with the slogan, "Life on the move, needs a bank on the move". To which any self-respecting laconic Cypriot could reply, "On the move with my money out of the country."
Following the hokey cokey (bail-in, bail-out, quite shaken all about) agreement with the so-called troika (the European Union, the European Central Bank and the International Monetary Fund) last week, the above-average Cypriots who access their online banking in the not-too-distant future are going to see some rather depressing line items on their transaction history as deposits over 100,000 euros are going to be partially converted into equity.
We are all used to seeing puzzling entries on an internet banking screen - little pinpricks of fiscal annoyance written in bank-ese.
"'XSR054-TRANS-PAY-INS-WE-SWEAR' - what's that for?" we call out to no-one in particular before we realise it's something levied by the government or the bank - or a cahootish combination of the two. We remembered vaguely hearing something about it on the radio.
One wonders how the deposit-equity swap will appear in a line item on the statements.
Will they glorify it as a sacrifice to save Cyprus: "WITHDRAW-TRANSXID-4505M-YOINK-NATIONAL-INTEREST"?
It doesn't bear thinking about - businesses and depositors who just happened to have a few bob are being press-ganged into bailing out less prudent institutions. And it might be time, too, to stop labelling them all as Russian oligarchs who found an oil concession down the back of their Politburo uncle's sofa.
Not every depositor is Russian and not every Russian entrepreneur is in the mafia, and even if they all were, then it would no longer be a mafia because there'd be no-one left to, er, maf.
It's a bitter pill to swallow: in addition to having austerity imposed, to be forced by the troika to bail-in a bank that failed because of government bonds it bought that were devalued by another bail-out negotiated by the same troika.
To get an idea of the unfairness of this, it would be like if your arrogant brother-in-law, with whom you already have a fraught relationship, took the money you had stashed in the tea-caddy, and bet it on a horse that was shot mid-race. A year later, the man who shot the horse is now standing at your door looking for your television and nice soap while your brother-in-law sheepishly apologises for any inconvenience caused.
Siphoning off resources to help out in a national crisis is nothing new, but it's a lot easier if you feel that there is no alternative or that the crisis is not your own country's doing.
Countries have paid tribute down through the ages to buy some time and peace.
Up to 100 tonnes of silver was paid by the English to some iron-willed Northern Europeans 1100 years ago in the form of Danegeld. Unlike the ECB, the Vikings were not promising emergency liquidity assistance. Rather, they promised not to increase the liquidity of your blood on the ground.
And during wars, governments have requisitioned thousands of horses and acres of land, food at knock-down prices and people accepted it as a fact of life in a crisis.
In this case, the requisitioning is not to enable a heroic fight to be fought but, instead, a dull, painful, mundane task of recapitalising a bank.
We had it here in Ireland but the government was canny enough to only take from people before the money got to the bank. To change the terms of the trust between a depositor and a bank would have been unthinkable because there was a bond of trust between them.
What's annoying about depositors losing money is that it could be the thin end of the wedge.
Of course Eurozone finance ministers deny this. They say Cyprus is a special case. But if you've ever had a thin-ended wedge, you have probably thought, "Hold onto that, we might use it for something."
Just because it's wedging a door open at the moment doesn't preclude it from being used, in conjunction with a mallet, for a future burglary.
Now that the line has been crossed, will future online banking sites be apologising for inconvenience caused?