Cyprus

[yoshiwara]

Banking is based on trust, on believe.

No bank in the world will ever be able to pay back the depositors if all / most / many depositors ask their money back.

And the 100.000 euro garantee? (assuming you live in a country with such a garantee)?

Ask yourself: where will that money come from?

Certainly a problem for Cyprus currently who do not have their own currency. For banks in the euro zone there is unlimited liquidity but not for aggravated insolvency.

Cyprus as well as Greece have to be nudged/forced to restructure their institutions. This is a strained and painful exercise.

[midas]

Banking is based on trust, on believe.

No bank in the world will ever be able to pay back the depositors if all / most / many depositors ask their money back.

And the 100.000 euro garantee? (assuming you live in a country with such a garantee)?

Ask yourself: where will that money come from?

Certainly a problem for Cyprus currently who do not have their own currency. For banks in the euro zone there is unlimited liquidity but not for aggravated insolvency.

Cyprus as well as Greece have to be nudged/forced to restructure their institutions. This is a strained and painful exercise.

" there is unlimited liquidity but "......only as long people have CONfidence....tick tock tick tock........ Edited April 2, 2013 by midas

[nidieunimaitre]

QUOTE: "For banks in the euro zone there is unlimited liquidity but not for aggravated insolvency."

QUESTION: What do you mean with those 2 statements?

QUOTE: "Cyprus as well as Greece have to be nudged/forced to restructure their institutions."

QUESTION: Only Cyprus and Greece? Or the entire (capitalist) world?

[yoshiwara]

QUOTE: "For banks in the euro zone there is unlimited liquidity but not for aggravated insolvency."

QUESTION: What do you mean with those 2 statements?

QUOTE: "Cyprus as well as Greece have to be nudged/forced to restructure their institutions."

QUESTION: Only Cyprus and Greece? Or the entire (capitalist) world?

Buying Greek debt assets is a write-down from hell. In the same bracket as buying Argentinian assets. The aggravation has been explained above.

Greece and Cyprus are good places to start for now. Just giving a broad brush to the entire capitalist system is a copout for those making grand statements and little more.

The sort of junk no doubt emanating from the Italian 5 Star Movement.

Cyprus and Greece will hopefully be slowly dragged backwards through a restructuring hedge. Neither want to exit the euro so they are in a pincer with a gun at their heads.

The unions and the State will no doubt try to mount a rear-guard action of resistance and falsifying the stats.

And (here we go) aided by the unions who have become just mouthpieces for the State sector a drag on growth,but of course fortified by anti-capitalist slogan shouting.

Syriza: all mouth and we want to stay in the euro. 5 Star Movement: Yet more mouth and a leader who can't drive a car without killing his passengers.

The so-called left is a busted flush. Bunga Bunga without the sex.

Edited April 2, 2013 by yoshiwara

[Maestro]

Cypriot Finance Minister Resigns
By LIZ ALDERMAN and JAMES KANTER
Published: April 2, 2013

PARIS — Michalis Sarris, the Cypriot finance minister who negotiated Cyprus’s bailout agreement with international creditors, resigned on Tuesday, citing the beginning of a government inquiry into the collapse of the country’s banking industry.

President Nicos Anastasiades accepted the decision by Mr. Sarris to step down, and the government quickly appointed Harris Georgiades, the deputy finance minister, as his replacement.

On the heels of Cyprus’s 10 billion euro, or $13 billion, bailout announced last week, a political blame game has broken open in the halls of power. Mr. Sarris has faced strong criticism for his handling of the crisis and had been under pressure from some factions in the Cypriot Parliament to step down.

Read more: http://www.nytimes.com/2013/04/03/business/global/cypriot-finance-minister-resigns.html?_r=0

The New York Times -- 2013-04-02

[Maestro]

Cyprus’ President-related company transfers €21mn to London prior to bailout agreement – report
Published time: March 31, 2013 19:29
Edited time: April 01, 2013 08:49

A company owned by in-laws of Cypriot President Nicos Anastasiades wired €21 million from Laiki Bank to London days before the Eurogroup’s crisis-triggering levy proposal, claims a Cypriot newspaper. The president demands an investigation.

During two days, 12 and 13 of March, the company A.Loutsios & Sons Ltd., co-owned by Loutsios John, the husband of Nikos Anastasiadis’ daughter, Elsa, took five promissory notes worth €21 million from Laiki Bank. The money was then transferred to London, reported Cypriot newspaper Haravgi, affiliated to the communist-rooted AKEL party.

The withdrawal was fulfilled just three days before the Eurogroup meeting when euro finance ministers agreed a 10 billion euro ($13 billion) bailout for Cyprus.

Read more: http://rt.com/news/cyprus-president-money-withdraw-129/

RT -- 2013-04-01

[NeverSure]

Cyprus should be awake-up call -a shot across the bow.

It should give us clear warning to those of us (which I don't mind admitting includes myself ) who had the wrong idea of what depositing my money in a bank account was meant to represent

It Can Happen Here: The Confiscation Scheme Planned for U.S. and U.K. Depositors

“ few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put

in the bank. Our money becomes the bank’s, and we become unsecured creditors

holding IOUs or promises to pay. (See here and here.)

But until now the bank has been obligated to pay the money back on demand in

the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into

“bank equity.” The bank will get the money and we will get stock in the

bank. With any luck we may be able to sell the stock to someone else, but when

and at what price? Most people keep a deposit account so they can have ready

cash to pay the bills. “

http://www.nationofc...tors-1364735979

Although I agree that depositors stand to lose a lot of money in a bank failure, I outright disagree with the author of that main link above. The bank never owns the depositors' money. Never.

A bank carries all customer deposits on the liability side of its ledger because it owes the money to the depositors. It carries loans and other assets on the asset side of its balance sheet.

From the second small link above:

Regarding Cyprus, recently I heard someone claim that depositors are not creditors of a bank despite the fact that deposits are bank liabilities. This is <deleted>. Depositors are indeed creditors, particularly in Europe where they are often legally pari passu with other unsecured creditors. Below is an extract from a presentation given by an ECB expert on bank resolution schemes addressing who gets preferential treatment in carving up the losses. The full PDF is linked below.

I think this is highly relevant to what is occurring in Cyprus

Depositor preference rule.

So, the first topic I would like to address is the debate surrounding the introduction of a depositor preference rule in insolvency. As you know, a depositor preference rule requires that in the insolvency of a bank the claims of depositors enjoy a privileged status. This is a powerful form of depositor protection, as it effectively pledges the assets of the bank for the benefit of depositors, so it is to be hoped that the existence of a depositor preference rule reduces the risk of bank runs."

And this is flat-out wrong, from the bottom larger link, and it conflicts entirely with the first quote.

"Can They Do That?

Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s..."

Bullocks is right.

Also, about a supposed agreement between the US Fed and the UK, the US has the FDIC which insures deposits up to US$250,000. That is for each individual account in each individual branch or bank. So a husband and wife could each have an account at the same branch, each with a balance of $250,000 and each would be insured. They could also own a business which had $250,000 in that same branch, and it would also be insured. Then they could go to other banks a replicate and be insured.

Before someone tells me the the US might have to default on that, unfortunately I think that's true.

[yoshiwara]

Creditors don't always get paid. Therefore CDS.

[midas]

" LARGE depositors in Laiki Bank who face losing most if not all their money have warned they will take the Central Bank’s top brass to court if even one cent is taken out of their accounts.

The threat of legal action raises the spectre of the bailout programme unravelling in the courts, and slapping the state with massive sums in penalties.The irate depositors argue they were misled by the supervisory authority which issued public and written assurances as late as in February that their deposits were not at risk. "

Central Bank could face slew of lawsuits from depositors

http://www.cyprus-mail.com/bailout/central-bank-could-face-slew-lawsuits-depositors/20130404

[midas]

" They are now demanding answers after allegations earlier this week that a company connected to the family of President Nicos Anastasiades shifted money out of one of the distressed lenders just before the banking system was effectively locked down on March 15."

Numbness gives way to anger in Cyprus over bailout

http://www.reuters.com/article/2013/04/04/us-cyprus-bailout-idUSBRE93310R20130404

[kevkev1888]

The cost of the rescue has risen to 23bn euros ($30bn; £19.5bn) from 17.5bn euros, according to Cyprus' creditors.

Analysts said the increase in the cost of the bailout meant Cyprus faced huge new challenges. Jonathan Loynes, chief European economist at Capital Economics, said that the "biggest burden of the increase in the bailout will fall on depositors and bank bond-holders, whose combined contribution will rise from an expected 5.8bn euros to 10.6bn euros."

http://www.bbc.co.uk/news/business-22116270

[Naam]

The cost of the rescue has risen to 23bn euros ($30bn; £19.5bn) from 17.5bn euros, according to Cyprus' creditors.

Analysts said the increase in the cost of the bailout meant Cyprus faced huge new challenges. Jonathan Loynes, chief European economist at Capital Economics, said that the "biggest burden of the increase in the bailout will fall on depositors and bank bond-holders, whose combined contribution will rise from an expected 5.8bn euros to 10.6bn euros."

http://www.bbc.co.uk/news/business-22116270

that is an assumption as the EU might step in again to assist.

[mccw]

Amazing how no body can notice; Surprise! You now owes us double what we agreed! <deleted>!

[midas]

Amazing how no body can notice; Surprise! You now owes us double what we agreed! <deleted>!

A new form of “ stress test “ on the people instead of the banks -if they don't break we can just keep ratcheting up

[yoshiwara]

" They are now demanding answers after allegations earlier this week that a company connected to the family of President Nicos Anastasiades shifted money out of one of the distressed lenders just before the banking system was effectively locked down on March 15."

Numbness gives way to anger in Cyprus over bailout

http://www.reuters.com/article/2013/04/04/us-cyprus-bailout-idUSBRE93310R20130404

But they never get angry enough to demand withdrawal from the Euro, so the innocence gig wears a little thin for the rest of Europe as it did with Greece.

[mccw]

Cyprus' central bank governor has warned he will only work with ministers on the country's EU bailout if the bank's independence is respected.

The comments from governor Panicos Demetriades come following a rift in Nicosia between the bank and political leaders over the EU/IMF-brokered bailout.

Last week, the government said the total bailout cost had jumped 6bn euros (£5.1bn) to 23bn (£19.6bn).

Mr Demetriades was appointed last May by the communist former administration but tension with the ruling centre-right government, in power for just two months, has deepened.

There has been growing pressure on him to resign over his handling of the economic crisis amid an unprecedented levy placed on bank accounts.

In the past week, the southern Cypriot parliament has started an investigation against Mr Demetriades.

President Nicos Anastasiades's government withdrew the appointment of his trusted deputy and three central bank officials resigned.

The unfolding drama drew a scathing response from European Central Bank (ECB) president Mario Draghi, who wrote to the Cypriot president telling him any attempt to effectively sack the governor could land Cyprus in the European Court of Justice.

Mr Anastasiades, when asked by reporters to comment on the apparent feud between the two bodies, said he was "frankly, very saddened".

"My intention to work with the country's democratic institutions is a given," Mr Demetriades, who sits on the ECB's governing council, was quoted as saying in an interview with the Phileleftheros newspaper.

"We are ready to respond to every call for cooperation and coordination for the benefit of this country always, however within the framework of total respect towards the central bank's independence, as stipulated by the ECB."

Under European Union law, a governor can only be dismissed if he no longer fulfils the conditions required for the performance of his duties, or if he is guilty of serious misconduct.

The investigation launched by Cypriot politicians last week is seeking to find out whether Mr Demetriades supplied enough information during an investigation into the demise of Cyprus's two biggest lenders, which left the economy in disarray.

The collapse of the Mediterranean island's banking system imposed massive losses on depositors in order to qualify for its 10bn euro (£8.5bn) bailout by the EU and IMF.

:: Gold futures dropped below the $1,500 barrier on Friday, the lowest since July 2011, just days after Cyprus moved to sell 10 tons of reserves to help fund the bailout.

-sky news app

[mccw]

A few choice informations in there

Edited April 14, 2013 by mccw

[socrates28]

Its turning into a massacre - I fear for my homeland for decades to come

And to think it was started by buying crappy JUnk Bonds from Deutsche Bank

Edited April 14, 2013 by socrates28

[mccw]

The democraticly elected government of this EU soverieng nation is getting a good ticking off for daring to think about replacing the "independent" central bank head who presided over the creation of the mess the country is now grappling with.

Is day "<deleted>" but its just par for the course these days.

[yoshiwara]

'Cyprus's central bank independence should be respected'. What a load of crap. First it rolled over to accept money no questions asked from Russian sources laundered through a multitude of front companies ('er established in Cyprus and good employment for the local population eh?) and second it rolled over gain for Greece and dumped the Russian deposits down the Greek bond drain. And then has the cheek to assert independence!? Never mind the how many? ministers getting in on the act just like their Greek counterparts. Germany and the ECB cannot be faulted when they have said No Way Jose! Its very simple. Don't like it? Return to a Cypriot currency. They never do of course. Just keep playing for time and hoping the Germans will pay. This time no. Probably.

[Naam]

Its turning into a massacre - I fear for my homeland for decades to come

And to think it was started by buying crappy JUnk Bonds from Deutsche Bank

bingo! it's always the Germans who create problems not only in Europe

but even on a global scale. whether it is the U.S. housing bubble, an

earthquake in Chile, a tsunami in the Indian Ocean or bankrupting honest

ClubMed DolceVita south European countries by flooding them with

junk bonds from Deutsche Bank.

[yoshiwara]

The democraticly elected government of this EU soverieng nation is getting a good ticking off for daring to think about replacing the "independent" central bank head who presided over the creation of the mess the country is now grappling with.

Is day "<deleted>" but its just par for the course these days.

Cyprus does not behave like a sovereign nation when it comes to Greece and thereby hangs its fall.

[yoshiwara]

Its turning into a massacre - I fear for my homeland for decades to come

Both the government and the people have calculated that playing the withdrawal from the EU card would be much more painful with a 'sovereign' currency and that the current medicine is a better deal. Ditto the Russians BTW. And so it is peaceful. And life continues.

[midas]

Exiting the euro is a debate we must have

The truth is that even after the ESM board of governors formally approves the proposal for a financial assistance facility agreement on April 24, the uncertainty and instability will remain.

http://www.cyprus-mail.com/euro-exit/our-view-exiting-euro-debate-we-must-have/20130414

Edited April 15, 2013 by midas

[mccw]

Its turning into a massacre - I fear for my homeland for decades to come

Both the government and the people have calculated that playing the withdrawal from the EU card would be much more painful with a 'sovereign' currency and that the current medicine is a better deal. Ditto the Russians BTW. And so it is peaceful. And life continues.

Not being able to appoint a co operative central bank governer might make the logistics of changing currency some what tricky no?

Looks like the EU are protecting their goon. Like the whole thing coulda been an inside job, a set up from years in the planing aided by the corrupt politicians.

Who's great idea was it exactly to invest all of the money in Greek debt? The Central banker? Who's ultimately in charge of the nations reserves. The one who is now still being protected by the ECB, yes?, so he can be a good poodle and implement their new and next waves of orders.

[Naam]

Its turning into a massacre - I fear for my homeland for decades to come

Both the government and the people have calculated that playing the withdrawal from the EU card would be much more painful with a 'sovereign' currency and that the current medicine is a better deal. Ditto the Russians BTW. And so it is peaceful. And life continues.

Not being able to appoint a co operative central bank governer might make the logistics of changing currency some what tricky no?

Looks like the EU are protecting their goon. Like the whole thing coulda been an inside job, a set up from years in the planing aided by the corrupt politicians.

Who's great idea was it exactly to invest all of the money in Greek debt? The Central banker? Who's ultimately in charge of the nations reserves. The one who is now still being protected by the ECB, yes?, so he can be a good poodle and implement their new and next waves of orders.

Who's great idea was it exactly to invest all of the money in Greek debt?

secret encrypted order from Berlin.

signed

A*n*e*a M*r*k*l

see headline Daily Mail tomorrow.

[Naam]

Who's ultimately in charge of the nations reserves.

Wolfgang Schäuble

source: Nitchell Farratch, Member of the British Empire

[Naam]

Exiting the euro is a debate we must have

The truth is that even after the ESM board of governors formally approves the proposal for a financial assistance facility agreement on April 24, the uncertainty and instability will remain.

http://www.cyprus-mail.com/euro-exit/our-view-exiting-euro-debate-we-must-have/20130414

what's there to debate? kick the suckers out! let them Rooshians do the financing with laundered Rubels instead of buggering the German taxpayer.

[yoshiwara]

Its turning into a massacre - I fear for my homeland for decades to come

Both the government and the people have calculated that playing the withdrawal from the EU card would be much more painful with a 'sovereign' currency and that the current medicine is a better deal. Ditto the Russians BTW. And so it is peaceful. And life continues.

Not being able to appoint a co operative central bank governer might make the logistics of changing currency some what tricky no?

Looks like the EU are protecting their goon. Like the whole thing coulda been an inside job, a set up from years in the planing aided by the corrupt politicians.

Who's great idea was it exactly to invest all of the money in Greek debt? The Central banker? Who's ultimately in charge of the nations reserves. The one who is now still being protected by the ECB, yes?, so he can be a good poodle and implement their new and next waves of orders.

Simply put Cyprus and Greece are family. Its not difficult to understand why.

[Naam]

Its turning into a massacre - I fear for my homeland for decades to come

Both the government and the people have calculated that playing the withdrawal from the EU card would be much more painful with a 'sovereign' currency and that the current medicine is a better deal. Ditto the Russians BTW. And so it is peaceful. And life continues.

Not being able to appoint a co operative central bank governer might make the logistics of changing currency some what tricky no?

Looks like the EU are protecting their goon. Like the whole thing coulda been an inside job, a set up from years in the planing aided by the corrupt politicians.

Who's great idea was it exactly to invest all of the money in Greek debt? The Central banker? Who's ultimately in charge of the nations reserves. The one who is now still being protected by the ECB, yes?, so he can be a good poodle and implement their new and next waves of orders.

Simply put Cyprus and Greece are family. Its not difficult to understand why.

it's because they both like to eat Souvlaki and drink Ouzo.