Cyprus surprise - Cypriot depositors to take a 'haircut'

socrates

wotsthat wrote: »

My guess is that there were talks between Cyprus and Russia today to try and mortgage future gas extraction. I assume that at some point this afternoon there came a call from Moscow along the lines of "you know how we've been portraying Angela Merkel as Adolf Hitler's long lost daughter? Well compared with this lot she's like Mother Theresa - start backtracking!"

For once we agree

antrobus

ChiefGrasscutter wrote: »

...

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

ANNOUNCEMENT BY CENTRAL BANK OF CYPRUS ON THE RESULTS OF THE 2011 EU-WIDE STRESS TESTING EXERCISE

Both banks passed the stress test. The estimated consolidated Core Tier 1 capital ratio of Bank of Cyprus would change to 6,2% and for Marfin Popular Bank to 5,3% under the adverse scenario in 2012 compared to 8,1% and 7,3%[1] respectively as of end of 2010. Adding to the results for 2012 under the adverse scenario the additional mitigating measures as reported in the results endorsed by the EBA, the ratio of Bank of Cyprus increases to 9,5% and the ratio of Marfin Popular Bank increases to 9,2%

5 July 2011

Bank of Cyprus Profit Warning

It is noted that as at 30 September 2012, the capital adequacy ratio of the Bank of Cyprus Group amounted to 7,6% with the Core Tier 1 capital ratio and the Tier 1 capital ratio at 5,0% and 7,3% respectively. Specifically, on the basis of the above expectations, it is possible that the Core Tier 1 capital ratio may be lower than 5% as at 31 December 2012

27 December 2012

From 9.5% to less than 5% in eighteen months or so. I guess things can change. Or perhaps the adverse scenario wasn't sufficiently adverse. As in, what happens if Greece goes bust?

Generali

antrobus wrote: »

ANNOUNCEMENT BY CENTRAL BANK OF CYPRUS ON THE RESULTS OF THE 2011 EU-WIDE STRESS TESTING EXERCISE

Both banks passed the stress test. The estimated consolidated Core Tier 1 capital ratio of Bank of Cyprus would change to 6,2% and for Marfin Popular Bank to 5,3% under the adverse scenario in 2012 compared to 8,1% and 7,3%[1] respectively as of end of 2010. Adding to the results for 2012 under the adverse scenario the additional mitigating measures as reported in the results endorsed by the EBA, the ratio of Bank of Cyprus increases to 9,5% and the ratio of Marfin Popular Bank increases to 9,2%

5 July 2011

Bank of Cyprus Profit Warning

It is noted that as at 30 September 2012, the capital adequacy ratio of the Bank of Cyprus Group amounted to 7,6% with the Core Tier 1 capital ratio and the Tier 1 capital ratio at 5,0% and 7,3% respectively. Specifically, on the basis of the above expectations, it is possible that the Core Tier 1 capital ratio may be lower than 5% as at 31 December 2012

27 December 2012

From 9.5% to less than 5% in eighteen months or so. I guess things can change. Or perhaps the adverse scenario wasn't sufficiently adverse. As in, what happens if Greece goes bust?

The ECB specifically didn't test for a Greek default as it was impossible so not worth testing. 'Criticised' isn't the right word to describe reactions, I think 'they were generally ridiculed for such a pointless exercise in ignoring the reality of the situation'.

The ECB has been uniquely incompetent since inception and appears to be getting steadily worse.

John_Pierpoint

One of those lugubrious Russians has just been on the radio.
He is keen to "save" Greek Cyprus.
When asked what was in it for mother Russia I got the impression he was saying - we could make a profit on this after we have confiscated the gangsters untaxed criminality.

Mind you I am not then sure what the redundant Cypriot bankers will do - perhaps raise goats for an annual religious sacrifice, like the TRNC does?

N1AK

Graham_Devon wrote: »

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.

You are right that in no meaningful way is this a tax rather than a one time levy. But that alone doesn't make it a bad option:

• If they put a tax of 5% on savings and refused to allow people to take money out for a year it would be a tax with a similar result; except it would leave people unable to access their money for a year.
• A 6.75% levy from the government isn't the same thing as losing everything because the bank failed and the government couldn't bail it out.

The Cypriot banks have attracted vast amounts of dubious foreign investment with high rates based on lending to risky borrowers. It would reward them for this behaviour if the EU stepped in and simply bailed them out without question or condition.

I have no intention of defending the levy that was proposed but it is clear that most Cypriots believe they are blameless and the EU is 'punishing' them out of malice when both of those things are manifestly untrue..

John_Pierpoint

Some say that Darwin beat Wallis to the publication of "The Origin of the Species" because some small newly ex colonial country had messed up on the loans it took in good times from the bankers of The City of London.
So let us take a look and see if we can do a deal and grab some real resources from such a silly warring part of the world.

As things turned out there were several such suitors who could be played off against each other.

In the fullness of time this small newly independent country evolved into a petro nation & currency. but it still could not organise a party in a rum distillery.

Like Cuba it is one of those places that has managed a trick like doubling the population and halving the sugar crop. Trouble is such a typical small economy just doesn't mind its Ps & Qs, failing to realise how vulnerable it can be, when the money runs out.

So as an aid to the Greek Cypriot government's evaluation of the road to Argentina, I offer these links:

http://www.mindspring.com/~tbgray/dollar.htm
http://heinonline.org/HOL/LandingPage?collection=journals&handle=hein.journals/intfinr28&div=171&id=&page=
http://en.wikipedia.org/wiki/Economy_of_Ecuador
http://en.wikipedia.org/wiki/History_of_the_Ecuadorian-Peruvian_territorial_dispute



A Galapagos Island development, brought to you by Uncle Sam, and largely blown up when no longer needed.
I guess the off duty GI's (or what ever they call the Snowden character Catch 22) must have spent a few useful dollars on some neighbouring island.

antrobus

Generali wrote: »

The ECB specifically didn't test for a Greek default as it was impossible so not worth testing.....

That's what I was getting at really. 'Stress testing' is a all very well and good, but it the results are entirely dependent on what stresses you test for in the first place.

grizzly1911

antrobus wrote: »

That's what I was getting at really. 'Stress testing' is a all very well and good, but it the results are entirely dependent on what stresses you test for in the first place.

Or you know it will fail so why bother testing. Why lift the lid if you don't want to let the worms out.

dryhat

Riots starting?......

http://www.youtube.com/watch?feature=player_embedded&v=5GgLbhca3Bk#!

Could be an interesting weekend.



Max Keiser now staring on RT

should be well worth a watch given the russian connection.

socrates

Maltese finance minister Scicluna says Cyprus had 'pistol at its head' during Eurogroup

http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_21/03/2013_489220