Comments on: EU imposes collective punishment on Cypriots

By: sklep-grzejniki.evbc.pl

sklep-grzejniki.evbc.pl — Fri, 07 Feb 2014 16:48:25 +0000

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By: Golem XIV

Golem XIV — Fri, 22 Mar 2013 22:07:33 +0000

In reply to Mark.

Mark,

Thank you. I did not know that about the number of British depositors.
Any more you can tell us please do.

By: Mark

Mark — Fri, 22 Mar 2013 21:47:46 +0000

It is a big mistake to assume – as Germany has done – that “the only people to be punished by a Cypriot haircut will be Russian crooks and money-launderers”. In fact, something like 40% of the Russian money in Cyprus belongs to large Russian banks. Part of the Russian financial system. The financial system that loaned money to Cyprus the last time it got in trouble. And while the largest amounts in Cypriot banks are owned by Russians, the largest number of depositors are Britons.

By: steviefinn

steviefinn — Tue, 19 Mar 2013 21:36:34 +0000

In reply to Golem XIV.

David

Just come across this, not part of the EZ, but I think the opposite of Cyprus.

http://www.bloomberg.com/news/2011-02-07/amagerbanken-senior-bondholders-to-suffer-losses-in-bailout.html

By: Golem XIV

Golem XIV — Tue, 19 Mar 2013 21:09:00 +0000

In reply to Steve Sayers. We'll never know for sure who first suggested the idea, but certainly the Troika endorsed and pushed for it. And now the Cyptiot parliament has said no to it.

By: Steve Sayers

Steve Sayers — Tue, 19 Mar 2013 20:32:28 +0000

Did the eu actually say rob babk accounts, or was it just a way for Cypriot gov to come up with the required contribution ?

By: Barry

Barry — Tue, 19 Mar 2013 20:11:34 +0000

“It also means the Cypriot government’s depositor protection scheme is worthless. It was a lie. It also means that since this has happened once, it can happen again. Only a complete fool would leave their money in a Cypriot bank.”

This says that the EU has abandoned the principle of deposit insurance, in favor of senior bondholder insurance. If you have money in *any* EU bank, that money is subject to confiscation to make sure that the bank’s bondholders are paid off.

Please note that the bondholders are likely to be financial institutions, who have full-time professionals tracking things, as opposed to the rest of us, who wouldn’t know how to evaluate a bank’s soundness.

The professionals are to be bailed out, the amateurs are to be punished.

By: John Souter

John Souter — Tue, 19 Mar 2013 12:02:34 +0000

The price of apathy in a world war against greed and hubris.

First they came in the dead of night for the gypsy’s – but I am not a gypsy! etc.

By: backwardsevolution

backwardsevolution — Tue, 19 Mar 2013 08:33:15 +0000

But the truth is that Cyprus is not in a position to rule out any ideas, even stupid ones. The facts of the situation are this: Cyprus is one of the most leveraged countries in the world, and its banking system has assets equivalent to eight times the country’s gross domestic product, the result of Cyprus’s attempt to turn itself into a major financial centre.

It did this by luring deposits with a favorable tax treatment and what many euro-zone policy makers believe were exceptionally weak anti-money-laundering controls, turning Cyprus into a haven for tainted money, particularly from Russia. These deposits were then used to inflate a domestic property bubble, to fund Greek corporate loans and to buy large quantities of Greek government bonds.

All three bets have since gone sour; last year’s Greek debt haircut alone cost the banking system €4.5 billion.”

http://online.wsj.com/article/SB10001424127887324178904578338262104986942.html

From Karl Denninger:

“I suspect, but cannot prove, that the reason for the IMF and ECB demand is that the ECB and other “protected” parties are the holders of the bonds in these banks, and had an orderly resolution process been carried out (or for that matter a disorderly bankruptcy) the result would have been a wipe-out of these institutions’ holdings.

Rather than accept that, having willfully and intentionally looked the other way and accepted those bonds (Greek) as collateral despite knowing they were worthless, they attempted to steal the funds from the people to cover it.”

By: Wirplit

Wirplit — Tue, 19 Mar 2013 08:01:01 +0000

Collective punishment…or collective Cock-up? …..and mostly by the Cypriot prime minister himself wanting to save his banking chums despite stuffing his own people…

http://uk.reuters.com/article/2013/03/18/uk-eurozone-cyprus-stumbled-insight-idUKBRE92H0RN2