Cyprus surprise - Cypriot depositors to take a 'haircut'

HAMISH_MCTAVISH

buglawton wrote: »

I think the haircut might after all have been the most pragmatic plan

Indeed.

though it should have tried to fairer by giving equity and multi property owners a haircut also.

They already had their "haircut".

Doth the Cypriots and all those wealthy Russians there protest too much?

Yes.

dryhat

Let's remind ourselves what happened during Spain's bailout.....


Spanish banks skint
Spanish government bails out spanish banks
Spanish government now skint
Italy (also skint) borrows money from IMF and lends to ECB
ECB lends it to spanish banks at 0%
Spanish banks then lend the money to Spain at 2-3%
Spain and Italy raise taxes and introduce austerity measures to pay for loans

And the architects of this wonderful plan are going to come to the rescue?

un-ber-f*cking-leivable

wotsthat

Graham_Devon wrote: »

One of the difficulties in Cypus now though is that the Cypriots were told they had a Guarantee too. This was then reitterated to them around a month back.

Then all of a sudden out of the blue, this promise was removed. Apparently all of a sudden the country would fall over and everyone would lose their jobs without doing this.

Now....they are told differently again. They are now supposed to believe, (after all this, and their banks shutting for 4 days, cash machines run out) that they have a guarentee again.

Your description of rationalality is not one I can comprehend.

Both Britain and Cyprus have a guarantee scheme. One is credible and one isn't - that's the long and short of it. Countries don't generally require bailouts because of their financial astuteness or credentials.

Cypriot depositors want 100% of their money back today with no strings attached. Unfortunately they deposited their money with banks who lent it to people who aren't going to pay it back. The money is gone, never to return and the banks can't repay it and neither can the state.

The only way they'll see their money again is if taxpayers from another part of the world reimburse them.

As it was taxpayers from countries (that haven't enjoyed such favourable tax and deposit conditions BTW) offered to reimburse 93.75% of the deposits. Cyprus has declined the offer so far - their choice - didn't seem like the worst offer in the world in retrospect.

grizzly1911

Glad the EU sorted out Greece, WSJ seem to be clear in the root of the problems.



Cyprus bail-out - live

The Cypriot finance minister has flown to Moscow to plead for aid, in defiance of calls from Angela Merkel to refrain from entering negotiations with Russia....



10.55 Cyprus' two largest banks - the Bank of Cyprus and Cyprus Popular Bank - might never reopen, according to a Cypriot minister. Speaking to Greece's Mega television, Socratis Hasikos, Cypriot interior minister said.....


10.40 The Wall Street Journal has produced an impressive graphic explaining the problems at the heart of the Cypriot banking system, especially the devastating impact of neighbouring Greece's banking crisis:

Credit: Wall Street Journal



http://www.telegraph.co.uk/finance/debt-crisis-live/9941984/Cyprus-bailout-live.html

dryhat

The Cypriot finance minister has flown to Moscow to plead for aid, in defiance of calls from Angela Merkel to refrain from entering negotiations with Russia....

Remember, the elites in charge of this charade are liars and thieves and hate the thought of people rebelling against their schemes.

And anything those in charge don't like or want is, by definition, good for the people.

Graham_Devon

HAMISH_MCTAVISH wrote: »

How many times Graham....

Deposit guarantees do not protect against taxation.

The Cypriots have now made things far worse for themselves, and they'll now lose far more money than the 6.75% most would have lost to this tax.

This will not end well...

And how mnay times Hamish...

This can't really be classed as taxation.

It's just a money grab plain and simple. You can plan for tax.

grizzly1911

Just out of interest anyone know if Cyprus were forced to lend to Greece?

Had Greece milked it's position, under the watching eye of the EU for years?

Just wondering.

socrates

Generali wrote: »

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.

I think this sums it up nicely

http://www.bloomberg.com/news/2013-03-19/in-cyprus-europe-sets-a-new-standard-for-stupidity.html

dryhat

grizzly1911 wrote: »

Just out of interest anyone know if Cyprus were forced to lend to Greece?

Had Greece milked it's position, under the watching eye of the EU for years?

Just wondering.

It's a money go round as I showed in post 443

And every one of those transactions involves £100s of millions skimmed off by banks.

When greece and italy voted for politicians who were against this, the eu refused to accept the result and put their people in charge.

And look who they chose to put in charge ..

In greece - goldman sachs employee
In italy - goldman sachs employee
Head of ECB - goldman sachs employee
Soon to be head of BOE - goldman sachs employee

You might say that this is because they have the "most talented" bankers.

I would say you are talking through your 4r5e.

(not you by the way griz, just talking generally)

socrates

grizzly1911 wrote: »

Just out of interest anyone know if Cyprus were forced to lend to Greece?

Had Greece milked it's position, under the watching eye of the EU for years?

Just wondering.

In a way yes - they took over the running/controlling interest in Cyprus Popular Bank - and all sorts of shenanigans were going on - I would like to find the story if I can about the Greek Monk and 37 million Euros disappearing

http://www.reuters.com/article/2012/06/13/us-greece-marfin-idUSBRE85C0M920120613