Cyprus - Legalised theft?

My financial knowledge is limited to housekeeping. I try to manage any spare cash effectively, but that is getting increasingly difficult with the abysmal interest rates which mean that everyone is effectively losing money on savings. Inflation & quantitative easing is eating away at the value all the time.

That is bad enough to my generation, which was used to seeing their savings grow year on year. We have had to get used to the banks changing their terms & reducing interest with very little notice. What has just happened in Cyprus seems to me to move the whole thing into a completely new ball game.

Cyprus was exposed to 22 billion euros of Greek debt. Half of their total bank deposits, (60 billion euros), were from wealthy Russians using Cyprus as a tax haven. Their credit rating went down to junk. Their bonds were not accepted as collateral. They followed Greece, Ireland, Portugal & Spain in the bailout route. Their whole banking system, along with so many others, was about to collapse. Basically they are insolvent & if they were a company they would go into administration

The solution was they closed the banks & stopped people having access to their money. The next good idea was to impose a levy on all depositors money. Unsurprisingly this did not go down well. This is the point where to my mind it becomes theft, and still could happen in any of the countries going through this long drawn out economic crisis.

The majority of ordinary people work for their money. They are taxed on their earnings, taxed when they spend money on daily living, taxed on their savings & taxed when they die. The state gets a substantial amount from most people one way or another. In principle I accept that. I also accept that there may be a need for restricted access to prevent panic & a run on a bank.

What I don't accept is the States right to simply take any sum they decide from investments in a bank to rectify their colossal mismanagement of the economy.

These problems didn't happen overnight. Who was minding the store? Do the people minding the store actually know what they are doing? I don't see any evidence to support the idea that they do.

At best this shambles is mismanagement, at worst it is criminal negligence. Why haven't we seen any heads roll? Instead of filling our prisons with many people who actually need help, it seems to me that quite a few of the senior people who are supposedly in charge should be held to account for the misery they have caused. If not prison, then make them give back a sizeable percentage of their outrageous salaries & bonuses to re - float the economies they have ruined.