{"id":3016,"date":"2013-04-04T21:09:06","date_gmt":"2013-04-04T19:09:06","guid":{"rendered":"https:\/\/clusterfamilyoffice.com\/blog\/?p=3016"},"modified":"2013-04-04T21:09:06","modified_gmt":"2013-04-04T19:09:06","slug":"en-chipre-no-se-han-confiscado-los-fondos-de-inversion-solo-los-depositos","status":"publish","type":"post","link":"https:\/\/clusterfamilyoffice.com\/en\/en-chipre-no-se-han-confiscado-los-fondos-de-inversion-solo-los-depositos\/","title":{"rendered":"In Cyprus, investment funds have not been seized, only deposits."},"content":{"rendered":"

\"\"It should be clear to everyone that what has happened in Cyprus may well set the precedent for the rest of the periphery, and we should therefore take a very close interest in the details (the devil\u2019s favourite abode) of this \u2018corralito\u2019\/confiscation. One of the concerns \u2013 obsessions, I would say \u2013 that peripheral investors should have at the moment is whether all bank deposits in Cyprus have been affected, or whether, on the contrary, only the money (an actual percentage yet to be calculated) that has actually appeared on their balance sheets.<\/p>\n

However, it is curious to see and read how practically no one considers making that distinction between money invested in products offered by Cypriot banks (IPFs\/deposits and other investment products offered by the banks themselves), and investments in third-party products for which the banks act merely as custodians \u2013 and therefore those investments do not appear on the banking system\u2019s balance sheet (external investment funds, listed shares, private equity funds, etc.). But this distinction is key when it comes to assessing the risk that our savings might be partially or wholly confiscated, or that they will be fully respected once the capital controls have been lifted and investors can once again move their money wherever they wish. Because\u00a0The \u2018corralito\u2019 is essentially a freeze, but what erodes our wealth is the confiscation, conversion, etc., of our money that takes place during that freeze<\/strong>, as we have already explained in<\/strong> \u201cThe Corralito begins today<\/a><\/strong>\u201c.And if our investments are held off the banks\u2019 balance sheets (although, I repeat, they are deposited with them), we will only face a temporary freeze, but not a confiscation or any impact on their value.<\/strong> At least provided that the financial authorities show a minimum of respect for accounting and legislative standards, because the Eurogroup and the Troika are capable of bypassing\u00a0in a bold, daring manner<\/em> any international accounting standard and\/or legislation, if doing so helps to put out any of the many fires surrounding us\/them.<\/p>\n

But\u00a0bullfights<\/em> Besides, the million-dollar question that every investor should be asking themselves right now is:\u00a0Have assets invested in investment funds, shares, etc. \u2013 which are off the balance sheets of Cypriot banks \u2013 also been seized in Cyprus? The answer is NO<\/strong>. That is the information we have received first-hand from two investment fund managers in Moscow, one of which is owned by a Russian bank, which held a briefing yesterday with its subsidiary in Cyprus to discuss this and other pressing issues.<\/p>\n

At this point, we must ask ourselves at least two more questions:<\/p>\n

    \n
  1. Should this fact (that assets held with Cypriot banks but off their respective balance sheets have been protected) make us feel more secure and confident if our investments are properly allocated to off-balance-sheet assets at our respective banks?<\/li>\n
  2. Is that enough to preserve our heritage?<\/li>\n<\/ol>\n

    In response to the first question, in principle, yes, but with all the caution and social distancing in the world, <\/strong>because what is at stake is something as important as our money \u2013 in other words, the future well-being or hardship of our family. And we cannot be too careful \u2013 not by a long shot \u2013 because legal uncertainty in the EU is rampant, like something out of a banana republic. <\/strong><\/p>\n

    And to answer the second question, no, it\u2019s not enough<\/strong>. In other words, we should invest in assets that are off the banks\u2019 balance sheets, but do so (by depositing those assets) with banks abroad, and\u00a0not being<\/strong> the owner of our assets is a Spanish resident, but\u00a0a financial vehicle not based in the European periphery<\/a><\/strong>. For example, a portfolio of investments in third-party funds held with a bank in Luxembourg, Germany, Switzerland, etc., where the account holder is not a Spanish resident but an insurance company or a company incorporated in those countries, which are outside the peripheral risk zone.<\/p>\n

    Obviously, not everyone can afford to take all these security measures. But with the right advice, it is within the reach of far more people than one might think. From \u20ac250,000 onwards, it is possible to find Luxembourg-registered vehicles that protect your assets by granting Luxembourg ownership (non-resident in Spain), whilst at the same time deferring taxation in the same way as any SICAV or transferable investment fund, but with a number of additional benefits.<\/p>\n

    Small savers who do not reach that 250,000 threshold can still manage their investments in assets held off the bank\u2019s balance sheet by depositing them in banks abroad. It is true that such portfolios would be at risk of confiscation if a political decision were taken to target all European accounts held by Spanish residents, and that in such a scenario, an investment vehicle would need to be used to ensure the portfolio is held by a non-resident in Spain, as we have mentioned previously. However, taking the Cypriot case as an example, this would have been sufficient to avoid confiscation, given that there \u2013 and for the time being \u2013 only accounts with investments on the banks\u2019 balance sheets (deposits, etc.) have been affected, and this only within the borders of Cyprus.<\/p>\n

    Decisions regarding the extent of the measures to be imposed on the population in any future action we may face in the Eurozone will depend on the amount of money that can be seized in each case, and on whether or not that amount is sufficient to plug the financial hole in question<\/strong>. If the majority of the population naively keeps their money in the balance sheets of their own country\u2019s banks (as has been the case in Cyprus), with a greater or lesser impact on domestic bank deposits, there will be enough.\u00a0If that is not the case, it will go even further<\/strong>, and it will also affect off-balance-sheet assets held with domestic banks. And if even that is not enough, because the population has already taken the necessary measures in advance, including at European level (or, conversely, first within the balance sheet at European level and finally affecting off-balance-sheet assets at national and international level). But affecting accounts abroad,\u00a0owned by a non-resident of the country affected by the confiscation<\/strong>, and with off-balance-sheet investments by the custodian bank, is currently unthinkable.<\/p>\n

    Is it a positive sign that Cyprus has respected assets deposited in the country\u2019s banks, even though these are invested off-balance-sheet? Yes, but not so much because it demonstrates respect for sound accounting practice and international law \u2013 no. Rather, it has been the result of catching Cypriots and Russians off guard, as they were relying on \u2018Daddy ECB\u2019 to bail out those insolvent Cypriot banks \u2013 which, after all, is a touch of justice, since it is the most unwary, who entrusted their money to insolvent banks, who will lose it.\u201d.\u00a0In Cyprus, there was no need to go any further, simply because they have already confiscated enough through this measure. But, as the saying goes, if the next \u2018corralito\u2019 requires going further with the confiscation, rest assured that if it has to be done, it will be done.<\/strong><\/p>","protected":false},"excerpt":{"rendered":"

    A nadie se le deber\u00eda escapar que lo ocurrido en Chipre puede ser el camino a seguir en el resto de la periferia, y por tanto deber\u00edamos interesarnos muy mucho por los detalles (residencia preferida del diablo) de ese corralito\/confiscaci\u00f3n. Una de las preocupaciones, obsesiones m\u00e1s bien dir\u00eda yo, que deber\u00edan tener los inversores perif\u00e9ricos […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38,54,45,39,40,52,37,48,55],"tags":[],"class_list":["post-3016","post","type-post","status-publish","format-standard","hentry","category-actualidad","category-asesoramiento-patrimonial-deportistas-artistas","category-asesoramiento-deportistas-artistas","category-crear-mi-propio-family-offices","category-gestion-financiera","category-asesoramiento-patrimonial-multi-family-office","category-reflexion","category-asesoramiento-patrimonial-multi-family-office-crear-mi-propio-family-offices","category-necesito-un-family-office"],"_links":{"self":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/3016","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/comments?post=3016"}],"version-history":[{"count":0,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/3016\/revisions"}],"wp:attachment":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/media?parent=3016"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/categories?post=3016"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/tags?post=3016"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}