Portugal, Italy, Greece and Spain were all mentioned at one time or another over the last week or so as other countries that might consider a similar levy.
At the time of writing, the Cypriot Government have voted against the terms of the latest bail out plans but my fear is that this type of idea could gather momentum in other areas. I have to say, I dont think it will because common sense dictates that this may just spark a run on the banks, the like of which we saw in the UK with Northern Rock and once that happens we are into a pretty serious bail out scenario.
Of course, to a certain extent there are politicians playing politics here as well and a certain amount of sabre rattling from Germany and others; so much so that it is difficult for the man in the street to interpret what it all really means.
However, the thought of potentially losing up to 10% of savings in one fell swoop does beg the question how safe are my savings in the bank?
For EU member countries there is an insurance backed deposit guarantee scheme to protect balances of up to 100,000 Euros per investor in each banking institution which has resulted in many people spreading their money around several banks which of course helps in normal times but I am not sure of the legality or implications of governments being able to take money from savers, to provide cash to avoid banks failing when they had be assured by the Governments that the deposit guarantee scheme protects them if a bank does fail. Put that all together and it seems a rather raw deal for the savers yet again you may say!
Perhaps it is time to review some of the sayings we use when talking about security Its as good as money in the bank! or Its as safe as houses!
Both of these markets have come under fire over recent years and maybe demonstrates that the comfort and confidence that one feels from familiar investments is perhaps rather ill placed after all.
So what lessons can we learn from these situations and how can we protect ourselves from the predatory influences that undermine markets and see hard earned money disappear in tax?
Well far be it from me to start a one man run on the banks but the answers are simply that a robust financial planning exercise will ensure that you have a reasonable spread of investments, so that you are not over exposed to any one market and that wherever possible, investments are wrapped in a way to minimize tax.
Funnily enough, you may just find that there are better returns to be made than cash deposits as well, without taking on higher risk along the way. It is certainly a good time to just ask a few questions and to perhaps take stock of where you are with your capital.