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The Bulgarian central bank warned the financial industry is under organized attack by anonymous e-mails, texts and rumors, threatening the Balkan nation’s security...

http://news.bbcimg.co.uk/media/images/75888000/jpg/_75888737_19d179ef-bde2-4079-9605-84b527cf7d28.jpg

More info here:
http://www.bbc.com/news/business-28052535
http://www.bloomberg.com/news/2014-06-27/bulgarian-lenders-under-attack-central-bank-chief-warns.html
http://in.reuters.com/article/2014/06/27/bulgaria-banks-idINL6N0P81SG20140627

When this problem becomes part of the past, maybe we will see a Bitcoin exchange that handles the LEV or BGN.

hurry, the first 100 people get their money...  :o   ... and maybe they will print as much as everyone wants but its worthless paper in the end.

man....its sad but this will happen all over the world in the next years and not many people know this.  :-\

it wont be that their paper money is worthless, it would be that their money in the bank would be worthless.

Who knows, maybe we will see a lot of people from Bulgaria pour money into bitcoin

These bank runs tend to spread across borders. There is a lot of weird unsettled stuff going on in the banking world right now.

At least bank's transaction can be reverted. So its almost risk free.

Blaming incompetency on rumor and attack surely sound nice.


Where there is smoke, there is fire.

Not if that bank is insolvent or freezes withdrawals. Having a bank account is worthless if you can't access your funds.

If the bank become insolvent, depositors will probably get a haircut.

maybe its a false flag banking event to institute a haircut on depositors funds like cyprus

Maybe real steps of anonymous against banks supporting cryptocurrencies (http://banksworstfear.com/) ?

It would be unlikely that your account would be completely worthless in the long run as you would eventually be given something. Although this something is likely to be much less then what your account should be worth based on how much you have deposited

In the long run is also a problem. Most people don't keep a decent stash of currency in the house. In the 2008 meltdown it was the people that caused the problem that got taken care of while the people that were truly hurt got nothing.

The bank system it´s a fonzi scheme, for making slaves. I dream with the day when all the corrupt bank institutions dead.

The media helps them blame the bad guy du joir and the cycle continues. Add in government power grabs in the name of protecting the little guys without ever solving the underlying problem and you get a vulnerable system. None of this is an accident.

yeah but much of that slavework goes to the governments so they will fight for it  :(

I deposit $1000 into the Bank

Bank Clerk types "+$10,000" on the keyboard and then the clerk lends out $9000 in mortgages and loans to other customers, which then goes towards other recipients who then spend this made up money on consumer goods, services and luxuries.  Withdrawal limits and other measures are brought in to prevent customers from withdrawing more money than the bank actually has.   Meanwhile, since there is all this extra money in society, people realize it's becoming worthless and therefore prices go up (inflation).

The only people who benefit from this are those who have the license to print money, the bankers.  Bankers are the same ones, for years, who have requested we move away from a cash society because it would make their evil work easier.   After all if there's no paper money then the bankers have complete control over everything.   


Fractional reserve banking has to go.  Why do we need bankers?  How can they necessarily be any better at banking than the average university math graduate?  If you're telling me you need to be born into a generational banking family to do risk assessments ("should I loan $300K to a guy who hasn't worked in 15 years?") then you must be "bright".

If you were to "turn off" fractional reserve banking then how would anyone be able to borrow money? For the most part they could not as there would not be any to lend by banks. You would still have sites like prosper and BTCJam, but these sites charge much higher interest rates then what you would expect for loans that are secured by something other then your signature. These sites also rely partly on the banking system in that they base your risk level off of your prior payment history of debts that was possible by a fractional reserve system.

Deflation is usually the result of major banking collapses as people no longer have access to money that they once had so they are forced to spend less not more money.

Yes because there was no bank loans before 1913 *sarcasm*

You upfront the collateral, plain and simple.  The reality is, if we didn't have easy credit in society, everything would be far cheaper (look at the cost of an university education 50 years ago versus today, where capital is very plentiful).

This is true however people can survive for some time without money. Most families keep some level of food in their house, don't need to fill up their gas tank every day, have a grace period on their rent/mortgage. If they were to change the way they got paid by their employer so they would be paid in cash then a family could somewhat get by until they are paid (now in cash) again

In developed and semi developed nation, people live day by day and only keep enough food in the house for a week.

There was fractional reserve banking *well* before 1913.

What does Happy Days have to do with this?

Is there any chance that this could affect BTC-e at all?

I know that they are based out of Bulgaria. Or at least that is the general consensus. They are pretty secretive.

I know they do use banks in London as well. But some of their money has to come through Bulgaria, right?

AFAIK they are only registered in Bulgaria, and that's all.

Anyone who is stupid enough to have money in a European bank probably deserves to be screwed.


The banking collapse already happened back in 2008 where we had the big financial boys make runs on the banks. Its already happened. People will wake up one day and find out all their money is gone, its inevitable. People gonna learn what fractional reserve banking is pretty soon.

https://twitter.com/thisweekscoin/status/482613027972595712

The Banks worst fear, my greatest hope.


Though I would argue in all this Banks get too much blame. The bigger problem is more specifically Central Banks and Government entanglement with them.


Banks just did what they are supposed to do, make money. And they were supposed to lose it if they failed.

Btc-e uses Czech bank, which is part of the whole European mess.

I would be worry if I have any balance there.

I would say worse: Many people in developed nations don't even keep enough food and water(!) for a single week. At the same time the supply chain today is much more fragile than it used to be, because storage capacities are kept at a minimum to optimize costs. Supermarkets will be emptied shortly after a serious event.

More bloody bailouts for a bankrupt country by the EU central bank,failed state helped out by a failed entity,you couldn't make it up,come on Bitcoin finish this game off

From the Guardian

EC approves credit line to support Bulgaria after bank runs
The European Commission has offered Bulgaria's banking system its assistance, to prevent the country's banking system sliding deeper into trouble, after last week's bank runs.

It announced this morning that it has approved a request from Bulgaria to extend a credit line of 3.3 billion levs (or £1.35bn), to support its banks.

The EC explained:

"The Commission concluded that the state aid implied by the provision of the credit line is proportionate and commensurate with the need to ensure sufficient liquidity in the banking system in the particular circumstances."

The authorities in Brussels also tried to calm savers' worries, having seen the queues that built up outside branches of two major Bulgarian banks in recent days.

It insisted that Bulgaria's banking system was:

"well capitalised and has high levels of liquidity compared to its peers in other member states. For precautionary reasons, Bulgaria has taken this measure to further increase the liquidity and safeguard its financial system".

The Bulgarian authorities have blamed the bank runs on people spreading mis-information. But there's no doubt people are worried

On Friday, many depositors at First Investment Bank, the country third-largest lender, dashed to withdraw their savings - forcing it to shut until this morning.

That statement is an outright lie. Authorities lie, because they can't do much else to stop the bank run. If only a fraction of the population demands their savings handed over, banks will collapse.

This should be taken very serious. Of course the World Cup comes in handy to distract the general public in Europe...

This is not how it works. A bank CREATES a loan against collateral (the common definition "out of nothing" is not correct) and this CREATES demand deposits. Cash in the same amount is never needed (only certain reserves by regulations).

A customer deposit is nothing else than a cash loan to the bank. The bank will tap this money, AFTER it created a loan and the loan amount goes to another institution or is paid out in cash (cash outflows).  If there is not enough cash deposits, the bank has to borrow cash from the central bank or other banks (creates interest expenses).  If there is too much cash deposits, the bank can pay back it's debt to the central bank or other banks (saves interest expenses) and lend excess money to the central bank and other banks (creates interest income). Cash is like a token to move demand deposits between institutions or between banks and the public. It is never needed in the same amount to maintain demand deposits (MZM >> M0). 

I deposit $10,000 cash into the Bank. Bank Clerk types "+$10,000" on the keyboard and the bank may pay it's liabilities/debt (to other customers, to the central bank, to other banks) the next second from my money. I get an IOU from the bank in return.

It's not really an outright lie. "high levels of liquidity compared to its peers" and "increase the liquidity" does not necessarily mean, that all available cash covers all demand deposits. You can have a look at the publicly available data of the Bulgarian central bank to see that all available cash does NOT cover all demand deposits.

Tell that to the guy on here who had 700,000€ taken from his account by the government.

Well in this case I don't want to know how bad the situation of those peers is... this could spread to other countries fast.

Gold and Bitcoin both jumping today. Coincidence?

Banking is a confidence game. A panic doesn't necessarily follow logic.

This is the case anywhere that fractional reserve banking is instituted.

bulggaria is not as high profile or a big (economy) of a country as greece is/was

It is small until someone find out it owed Germany or UK a lot of money.

Hi,
Everything is stabilized today :)
I was to Fibank for my business account and checked verything is ok. No waiting on long tales anymore :) Please calm down
BR

Buy extra food and supply just in case.

That is actually a great point. I'd suggest stocking up on WATER and canned food, everyone always forgets water (and you'll die from dehydration before starvation). You'd be surprised how much water/canned food even $40 USD can get you. Oh and make sure you neighbors don't see you stocking up on supplies :P

Everything is okay until you ask to cash in your Fibank IOUs.

Do they owe europe a lot of money? The amount should be measured in terms of percentage of the German/UK economy, not the bulgaria economy.

Modern finance is a lot like alchemy. Web upon web of debt and single failure causing the whole system to crumple.

They do now  :D

This is coming to a bank near everyone someday.

At first there will be delays and hopefully they will be able to get printed cash to fill the demand for deposits of their customers.

Get ready everyone.

Wouldn't happen to country with high reserve requirement and sound lending practice.

If credit is too tight in the form of banks needing to keep too much in reserve and too strict lending standards then they would be unprofitable and would eventually fail as they could not make enough from the loans that they make.

If lending is too tight then people would not be able to get loans which is almost as bad as an outright financial crisis.

Or do like me, forget buying the water....just live on a fresh water lake and buy a kit to convert the water to potable water...unlimited supply and no worries of dehydration...

natural that they panic because their money was there
seems to be more cautious in choosing a bank to save our money

And the excuse will always be a technical glitc on a friday. Technical glitces will come and be resolved at first, that is to condition people to think that it is just the way of life. Most people will be taken by surprise. That is the point.

Not likely to happen in the US with FDIC insuring peoples accounts...The government would just print the money and cover the shortages....Whether its the bank creating money or the government creating money it doesn't matter, they are all intertwined and in cahoots with each other to keep their 'fractional reserve' banking scam alive and kicking...

So what is the situation on the ground in Bulgaria - does anyone know?

FDIC doesn't have enough fund to cover more  than 3-4 international banks going bust in the same year. If you are talking about Fed bailing out FDIC also, then yes, the bail out can be artificially any amount until the creditor nations stop accepting USD for balance of payment.

The FDIC has 50 billion dollars - probably in the form of bank deposits. It's a joke. The implicit guarantee from the government is what you have to rely on.

Already happening IMO. Certain ATMs are frequently broken. ATMs that used to be bank branded are now unbranded. Disappointed people are heard to say "This one's always breaking down", as if the machine is somehow having a bad day. Sometime soon, I'm expecting to hear the muttering change to "This one never works now, they should turn it off ". It's like that part in "don't be a menace to south central while drinking juice in the hood" where the mailman pops up saying "message!". No-one's getting the message though.

The FDIC does not need more then that much. Many banks have failed over the past several years and the FDIC was able to make deposit-holders whole. Most banks that fail are very small with only a few billion in deposits at most.

Yes FDIC is sufficient when a small local bank out in the wilderness goes bust. That's exactly what I said.

1 or two Chase or Bank of America types going down in a short amount of time would snowball into something huge. These banks are so incestuous that a shock affects the entire system.

When you have the money press like the US government, whats to stop you from just printing up the needed money to float even large banks like that to avoid such a thing happening?

Even though the FDIC has the guarantee of the federal government, it is suppose to be self sufficient, that is that the premiums collected by the FDIC from the banks should cover any losses from failed banks.

Again, this is what I said. What it is supposed to be, is not the same as what it is.