Shock in Cyprus as savers face bailout levy

[Euler]

Cyprus says 'significant progress' in debt crisis talks

http://www.bbc.co.uk/news/world-europe-21909673

Mr Sarris was also quoted as saying Cyprus was considering a 25% levy on deposits of more than 100,000 euros (£85,000) in its biggest bank.

Makes me shiver.

Not sure why they call depositors in a bank, 'investors'. They never 'invested' in the banks at all.

[haichless]

wasnt the euro set up to amongst other things ensure that a euro in gerrmany was the same as a euro in greece or in spain or cyprus, basically what the EU has just done is say to the cypriots, your euro is only worth 90cents not a euro, which means the euro is defunct, pointless trying to save it when the participating currencies are not equal even in the eu's eyes.
I never thought I would say this but thank god for Gordon Brown making at least one very good decision. Credit where its due,just like blame.

[Iron]

Cyprus says 'significant progress' in debt crisis talks

http://www.bbc.co.uk/news/world-europe-21909673

Mr Sarris was also quoted as saying Cyprus was considering a 25% levy on deposits of more than 100,000 euros (£85,000) in its biggest bank.

Makes me shiver.

I'm in two minds about this - I think this is one of those 'devil and the deep blue sea' scenarios. There are no good options.

However, I think it sets a dangerous precedent for a government to confiscate money from people's bank accounts (although you could argue that it's effectively been happening for years with QE).

I hope the people making these decisions have better security arrangements in place than Boris Berezovsky. One does not steal billions of euros from the mafia and expect to live to a ripe old age...

Not sure why they call depositors in a bank, 'investors'. They never 'invested' in the banks at all.

Typical BBC bias. They probably want their readers to think that the people who are taking a haircut are the bank owners, not wholly innocent savers...

Jeff

[Euler]

I sense the EU may be trying to introduce an element of moral hazard with Cyprus with the terms of this bailout. I guess they feel it's such a small part they can send a message without risking further problems?

That's what I'm reading between the lines.

[James1st]

Cyprus has secured a 10bn euro (£8.5bn) bailout, saving the country from a banking system collapse and bankruptcy.

In return for the rescue funds, Cyprus must restructure its banking sector under an EU-IMF plan approved by eurozone ministers earlier today.

Markets across Europe rose in early trading on Monday morning in response to the last-minute deal.

The country's second-largest bank, Popular Bank of Cyprus, known as Laiki, will effectively be shut down and split into a "good bank" and a "bad bank".

Deposits below 100,000 euros (£85,509) in Laiki will be safeguarded and transferred to the Bank of Cyprus, the so-called "good bank".

Deposits above 100,000 euros, which under EU law are not insured, will be frozen and will be used to resolve debt. It is not yet clear how severe the losses will be for these depositors.

http://uk.news.yahoo.com/small-explosio ... ml#RUThFyk


Everyone should take the hint!

[Iron]

Have The Russians Already Quietly Withdrawn All Their Cash From Cyprus? - http://www.zerohedge.com/news/2013-03-2 ... ash-cyprus

[superfrank]

wasnt the euro set up to amongst other things ensure that a euro in gerrmany was the same as a euro in greece or in spain or cyprus, basically what the EU has just done is say to the cypriots, your euro is only worth 90cents not a euro, which means the euro is defunct, pointless trying to save it when the participating currencies are not equal even in the eu's eyes.
I never thought I would say this but thank god for Gordon Brown making at least one very good decision. Credit where its due,just like blame.

the Euro is still significantly more valuable than sterling since it's inception. every time the BoE prints money via QE they are diluting the value of the £ for everyone that holds £s, which, effectively, is no different to the Cypriot situation (and that only affects depositors in Cyprus).

remind me of Gordon Brown's "very good decision", it wasn't obvious from your post...

[haichless]

he kept us out of the euro, (blair wanted in, as did the tories, as did the lib dems)
brown was an idiot as a pm, has been found wanting in his dealings with the banks when chancellor, and im certainly no fan, but he did make that decision which is to his credit.

[Will Sharpe]

Have The Russians Already Quietly Withdrawn All Their Cash From Cyprus? - http://www.zerohedge.com/news/2013-03-2 ... ash-cyprus

I was actually wondering why, (if you are Russian / foreigner) you still had your funds exposed on an account in Cyprus? This has been in the cards for some time and there has never been any guarantee for funds >100' EUR....

[Euler]

You would think that money with some power behind it would leave though, by fair means or foul.

This has been the whole problem with the Euro proposition for ages though, it was well know. Inequalities mean movement or capital, work and people. That is the only way for the Eurozone to balance out under a single currency.

I was surprised at how people didn't grasp this concept even when the ERM collapsed.

[haichless]

You would think that money with some power behind it would leave though, by fair means or foul.

This has been the whole problem with the Euro proposition for ages though, it was well know. Inequalities mean movement or capital, work and people. That is the only way for the Eurozone to balance out under a single currency.

I was surprised at how people didn't grasp this concept even when the ERM collapsed.

They were a great band,shame they collapsed and went seperate ways and very politically aware, I guess its because they didnt make a big deal out of their beliefs and so not many people looked into what they were saying. I dont think they would influence bank investors though.
Everybody hurts.....sometime..

[superfrank]

he kept us out of the euro, (blair wanted in, as did the tories, as did the lib dems)
brown was an idiot as a pm, has been found wanting in his dealings with the banks when chancellor, and im certainly no fan, but he did make that decision which is to his credit.

you're right, he did, but my guess is he resisted the Euro for reasons other than that it was economically flawed (maybe just to assert his authority over Blair?)

a small minority of Tories wanted in; the Lib Dems are clueless and would have signed up to anything with a European badge on it.

[superfrank]

Not sure why they call depositors in a bank, 'investors'. They never 'invested' in the banks at all.

i'm not sure why shareholders are called investors most of the time either. if a person buys into an IPO, or provides funds for a new business venture, then fair enough, that's an investment.

most people with shareholdings are simply 'owners'. if i buy some BP shares today then i'm not investing in that business, i'm merely owning a tiny bit of it - the company got it's investment capital 40 years ago, and those shares may have changed hands 20 times since. not really 'investing'. shareholders is a better name.

Cyprus Bailout Infographic http://uk.saxomarkets.com/fx-debates/cy ... nfographic

[Iron]

True, but are you not investing in the sense of trying to make money out of money, even though you are not loaning money to the company (just as buying a gold bar in the hope that the price will rise is an investment)?

Jeff

most people with shareholdings are simply 'owners'. if i buy some BP shares today then i'm not investing in that business, i'm merely owning a tiny bit of it - the company got it's investment capital 40 years ago,

[superfrank]

True, but are you not investing in the sense of trying to make money out of money, even though you are not loaning money to the company (just as buying a gold bar in the hope that the price will rise is an investment)?

i guess so. 'invest' is an over-used word is what i was really trying to say. someone laying a horse hoping it's price will increase is a trader (gambler to most!).