Cyprus surprise - Cypriot depositors to take a 'haircut'

grizzly1911

cepheus wrote: »

Might they bring back the Cypriot £? Perhaps that is more worrying for Europe, Spain and Italy than the levy?

Cyprus have still got the newly discovered gas fields. I'm surprised one of the large oil companies can't bail them out in return for a stake.

Gazprom already in the offering.

Generali

grizzly1911 wrote: »

Did normal people save in Russia, if so what for exactly, a loaf of bread, a tin of sardines, something to put in the Lada.?;)

My understanding is that people in much of communist Europe were big savers as there wasn't much to spend money on.

Prices for things like cars and consumer goods were low and thus these things were not widely available. Rationing was by waiting list not price, the same as the NHS in the UK.

I wonder why Wookster was PPR'd. Hopefully he'll be back under a new name.

It's hard to see how this Cyprus thing could have been handled much worse. The idea of bank savers being bailed in is a reasonable one IMHO but you can't simply announce and then unannounce it!

socrates

Generali wrote: »

It's hard to see how this Cyprus thing could have been handled much worse. The idea of bank savers being bailed in is a reasonable one IMHO but you can't simply announce and then unannounce it!

Is it not possible that the idea was put out there to see the reaction to 'bail ins per say' - so it could be repeated elsewhere at a later date - Cyprus is a very good guinea pig

Thrugelmir

Are the Cypriot banks heavily invested in Greece? Is this the root of the problem.

With balance sheets 8 times GDP . The banks are far higher leveraged than even the Irish banks.

socrates

Thrugelmir wrote: »

Are the Cypriot banks heavily invested in Greece? Is this the root of the problem.

With balance sheets 8 times GDP . The banks are far higher leveraged than even the Irish banks.

Yes

something that has not been discussed is that the Cypriots and other private investors were sold (mis sold) bonds that turned out to be junk bonds

Losses over 1.2 billion Euros

Around a year ago or less was when it all came to light

Parliament was stormed a few times over the matter and the banks were under pressure to return monies to investors due to miselling

Mr_Mumble

Thrugelmir wrote: »

Are the Cypriot banks heavily invested in Greece? Is this the root of the problem.

Yes and yes. Cypriot banks had exposure of 30 billion Euros to Greece at the end of 2010 (note the date on the blogpost, 23 months ago!):
FT Alphaville - Between Greek default and dodgy Russians

Assuming the 5.8bn Euros in Greek sovereign debt was held by Cypriot banks until Greece defaulted this would have seen a loss circa 80%, about 26% of GDP. The small amount of Greek bank credit is probably still intact but the default rate on the 24 billion of Greek private sector direct loans must be pretty high.

socrates

John_Pierpoint wrote: »

Seems rational behaviour; how does it work? Do the unrecognised people from the North still count legally as Cypriots and so members of the EU?
I did meet a Turkish Cypriot once, who had a good moan that he had come over to cold wet Britain because he could earn more in an hour here than he could earn in a day in embargoed Cyprus. He was working on a garage forecourt and probably feeling home sick.
Mind you that was in the days when a euro was worth 59p and Turkish money was measured in 100s of millions.

Yes they do count as Europeans BUT they are not being harassed by the mainland Turks - it was done merely to milk the system

John_Pierpoint

Surely all Cypriots are entitled to come here and receive benefits available to all EU citizens?

Hence my comment above about substituting "Turk" in the news story.

http://www.huffingtonpost.co.uk/2013...n_2715049.html

John_Pierpoint

dryhat wrote: »

The chief of the bank of cyprus is on leave from his post as a lecturer at Leicester university.

http://www2.le.ac.uk/departments/economics/people/pdemetriades

Fantastic.



You REALLY couldn't write this 5h1t

You have to realise that we are taking about the wars of the roses here.

When reading any stuff just substitute "Yorkshire/Humberside" for "Cyprus/TRNC" and you will still be considerably over estimating the population area and GDP. My local councillors, get into this sort of mess every year at about this time.

http://en.wikipedia.org/wiki/Cyprus
http://en.wikipedia.org/wiki/Yorkshire
http://en.wikipedia.org/wiki/Iceland

Generali

socrates wrote: »

Is it not possible that the idea was put out there to see the reaction to 'bail ins per say' - so it could be repeated elsewhere at a later date - Cyprus is a very good guinea pig

It's possible but unlikely IMHO. The German election is coming up and the Govt didn't want to give 'German' money to money launderers.

In 2007, 3rd party money laundering wasn't a crime! No idea whether it is today but it shows how lax the rules are. Cyprus is generally considered to be a high risk country for AML rules, that is if you do business with a Cypriot entity you must assume that there is a high risk that it is for the purpose of laundering money.