Cyprus surprise - Cypriot depositors to take a 'haircut'

grizzly1911

socrates wrote: »

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

Good link. Summary point which I allude to in #436.

A rescue that would have achieved a restructuring of Cypriot banks on lenient terms for the country’s citizens would have cost German taxpayers next to nothing. It could have provided a model for the next phase of financial cooperation, to which Germany is supposedly committed. After a series of calamitous financial missteps, it would have confirmed that the EU is finally getting on top of its problems.
The problem isn’t that Germany and its EU partners were selfish. It’s that they were stupid.

socrates

John_Pierpoint wrote: »

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

However the Greek Cypriots did not - they were in the process of employing outside workers to replace the TC's the same TC's who complained the GC's were persecuting them were now their employers

Return to Northern Cyprus to see that the Turkish Government had no ideas - so off to London with their new passports to claim benefits - from our taxes

I am sure you will say this OK as you have taken the opposite stance on everything I have said

vivatifosi

socrates wrote: »

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

IIRC the story re the greek monks was touched on in Boomerang, by Michael Lewis. There was almost a whole chapter on it. It is certainly about Greek monks and an 'interesting' land deal. That one was in mainland Greece, so whether this is a different set of shenanigans or the same I don't know. If it is a different one, well that's rather scary.

dryhat

vivatifosi wrote: »

IIRC the story re the greek monks was touched on in Boomerang, by Michael Lewis. There was almost a whole chapter on it. It is certainly about Greek monks and an 'interesting' land deal. That one was in mainland Greece, so whether this is a different set of shenanigans or the same I don't know. If it is a different one, well that's rather scary.

One of the symptoms, not the cause.

socrates

dryhat wrote: »

One of the symptoms, not the cause.

It was an example to show you how the Greeks from the mainland systematically abused their control over the bank

antrobus

grizzly1911 wrote: »

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

Cyprus is a small island. The Greek bit is smaller still. If you have banks there that are scooping up billions of euros from Russian oligarchs (allegedly), then there's a limited scope for lending on the money at home, so you need to look elsewhere. For historic, language etc reasons Greece is the obvious place. The Bank of Cyprus (for example) has more branches in Greece than it does in Cyprus.

antrobus

grizzly1911 wrote: »

....


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:

The Bank of Cyprus Group ... announces that the Group’s results after tax and before the impairment of Greek Government Bonds (GGBs) for the financial year ending 31 December 2012 are expected to have a significant negative deviation compared to the published results for the year 2011. This deviation is mainly due to increased provisions for impairment of loans ... as well as reduced operating income.

As a result of the above, the Group’s capital adequacy ratios will be negatively affected. (Translation: 'We made a loss'.)

Profit Warning 27 December 2012
http://www.bankofcyprus.com/en-GB/Start/News/Profit-Warning-/

The Bank of Cyprus were due to announce their results at the end of last month, but have delayed the announcement, pending someone actually making a decision I'd imagine.

ChiefGrasscutter

Daily Telegraph live blog now saying banks not expected to open until next Tuesday at the earliest.
..and that Capital controls are being considered when they do.
Sounds all a bit like Argentina's 'Corralito'
http://www.telegraph.co.uk/finance/debt-crisis-live/9941984/Cyprus-bailout-live.html

Remind me - didn't the banks all pass the EU stress test in 2011?
http://www.centralbank.gov.cy/nqcontent.cfm?lang=en&a_id=11847
and
http://www.cyprus-mail.com/cyprus/cyprus-banks-pass-eu-stress-test/20110716

ILW

Good point about the stress tests.
Could that mean all the others could be failing as well?

wotsthat

ChiefGrasscutter wrote: »

Daily Telegraph live blog now saying banks not expected to open until next Tuesday at the earliest.
..and that Capital controls are being considered when they do.
Sounds all a bit like Argentina's 'Corralito'

Can't really see any option but capital controls now when/ if the banks reopen.