Reasons to open a foreign bank account today!
What could be more important than the safety and stability of your savings and assets? Perhaps only the reliability of your bank. Yes, it is the bank that should be not just a storehouse, but also a reliable friend of your savings. In a savings bank, they can both grow successfully and disappear with lightning speed.
Below we consider the reasons for owning foreign bank accounts.
Why and why do you need to open a main and reserve bank accounts abroad, when you can open a foreign account without problems, for example, in a representative office of a foreign bank or in a supposedly stable and well-capitalized local bank?
The reason for opening a foreign bank account number 1 – Political Risk
Political risk is not something separate from your realities. In fact, all tax residents of a country with local bank accounts are subject to political risk. This risk creates your own government.
Unfortunately, most of the governments around the world are literally drowning in insolvency and holes in state budgets. And the best way to patch the holes of a sinking ship is to take drastic measures that are practiced every century. Each new generation does not assume, and does not believe, that the government can expropriate assets and funds in one fell swoop.
Looking for specific examples of governments expropriating property from the 21st century? Remember Cyprus with its haircut deposits, the tax on bank deposits in Spain, the nationalization of pension savings in Poland, Hungary, Portugal and Argentina, the introduction of exchange controls after the “haircut deposits” in Cyprus, and the same currency control in Iceland and so on. And these are just a few examples in the last ten years.
The banking sector in Cyprus continues to struggle with problem debts
Do you think that all this cannot touch you? In vain …
According to the American judge, Andrew Napolitano:
“… People who have more than $ 100,000 in a bank are targets for any government that seeks money to strengthen its own ability to manage its finances.”
In fact, you can understand that you are at risk even without the expert opinion! It is quite enough to follow the elementary logic. No wonder that in the EU the amount of the guaranteed deposit is only 100 thousand euros and no more. Everything else can easily go to the benefit of the state, the insolvent credit and financial institution, and so on.
The main solution to minimizing political risk is to place savings outside the country in which you can be expropriated. And it is desirable to diversify this distribution of funds. The example of Cyprus perfectly demonstrated to us that simply withdrawing money “over the hill” is not enough.
So, opening several alternative foreign bank accounts will avoid political risk. The main selection of the right jurisdiction and the bank itself, which can provide you with a greater degree of confidentiality and confidence in the future, unlike the country of your tax residence.
The reason for opening a foreign bank account No. 2 is the bare banking systems and banks
No matter how sad it is to realize, but almost the entire Western banking system is now breathing its last. There are plenty of reasons for destabilization – not only economic, political, and macroeconomic difficulties, but also a catastrophic shortage of money.
Just take a look at Deutsche Bank, which is the largest bank and was once the strongest financial institution of Germany. And now he purposefully begins to sink in the “American quagmire.” As a result, almost all banks related to Deutsche correspondent relationships suffer from this. For example, the non-resident banking sector in Latvia, which due to the loss of correspondent relations with Deutsche Bank, may very soon befall the fate of offshore banks and even the central bank of Belize.
The banking crisis in Europe: Deutsche Bank is just the tip of the iceberg
Will a $ 14 billion fine from Deutsche Bank AG affect Latvian non-resident banking?
Citibank terminates correspondent banking with Belize Central Bank
Too big to go bankrupt? They used to say that about Lehman Brothers. But time proves us the opposite, and now everyone understands that they can expect Europe after the collapse of the bank, which is similar in meaning and size to Lehman Brothers.
Yes, the names of these banks – Deutsche Bank, HSBC, Citi, UBS, and so on, are very well known. But, one name today is not enough to be confident in the future.
Today there are plenty of small compact boutique banks, many of which belong to associations of families of the Hayneta for several centuries already located in countries with a small public debt. Such banks are quite well capitalized due to the fact that they are pursuing a more conservative policy and are not betting on customer deposits.