How to protect your savings from a bank run and which banks to avoid
Neither systemic banks nor credit unions shield you from a bank run. Where to shelter your savings and what to do about the modelo 720.
English · Original discussion in Spanish · Published
Where to shelter your savings if a government decides to seize them
Do you really think your savings are safe just because your money is in the country's biggest bank? Recent history suggests otherwise. When a government is backed into a corner, the size of the institution matters little: a bank run, the seizure of deposits or a so-called deposit levy can hit anyone. The Cyprus case in 2013 and the bailout of Bankia with public money are uncomfortable reminders.
Some argue that credit unions such as Caja Rural or Cajamar are no safe haven either: undercapitalised and heavily exposed to regional real estate, they would be the first to fall. Others, however, distinguish between the Spanish IBAN and the solvency of the institution. Openbank, Sabadell, Bankinter or Cetelem offer competitive terms and are not fee-charging rip-offs. Those who distrust the whole system prefer to diversify outside it: physical gold, a cash cushion at home and foreign brokers such as Degiro or Interactive Brokers, although that means dealing with the modelo 720 (a Spanish tax form for reporting assets held abroad).
The practical conclusion is nothing new, but nobody seems to apply it: spread your money around, don't concentrate it. And if the antiestéticar is of a government getting its hands on it, the only real protection is not depending on a single jurisdiction.
Do you really think your savings are safe just because your money is in the country's biggest bank? Recent history suggests otherwise. When a government is backed into a corner, the size of the institution matters little: a bank run, the seizure of deposits or a so-called deposit levy can hit anyone. The Cyprus case in 2013 and the bailout of Bankia with public money are uncomfortable reminders.
Some argue that credit unions such as Caja Rural or Cajamar are no safe haven either: undercapitalised and heavily exposed to regional real estate, they would be the first to fall. Others, however, distinguish between the Spanish IBAN and the solvency of the institution. Openbank, Sabadell, Bankinter or Cetelem offer competitive terms and are not fee-charging rip-offs. Those who distrust the whole system prefer to diversify outside it: physical gold, a cash cushion at home and foreign brokers such as Degiro or Interactive Brokers, although that means dealing with the modelo 720 (a Spanish tax form for reporting assets held abroad).
The practical conclusion is nothing new, but nobody seems to apply it: spread your money around, don't concentrate it. And if the antiestéticar is of a government getting its hands on it, the only real protection is not depending on a single jurisdiction.
Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (17 replies).
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