Cypriot Bailout Sends Shivers Throughout the Euro Zone
1–10 of 92 posts
Re: Cypriot Bailout Sends Shivers Throughout the Euro Zone
#2The government also extended a bank holiday that was put in place to try to stop a run on the banks. The holiday was supposed to end Monday night. Now, banks will not be opening their doors Tuesday, as planned. There was talk that they might not open Wednesday, either.
[...] “As soon as banks in Cyprus reopen, people will rush to take all their money out, because they don’t believe this is a one-off deal,” he said. “When a bank run happens, the E.C.B. will have to pump in liquidity,” he added, “and what you will have is a shell of a banking system supported by E.C.B.-eligible Cyprus bonds, which will rocket the debt of Cyprus out of control.”
Re: Cypriot Bailout Sends Shivers Throughout the Euro Zone
#3They can't reopen the banks without limiting the amount of money people can withdraw. Thus the death spiral of the entire worldwide financial system begins.
Re: Cypriot Bailout Sends Shivers Throughout the Euro Zone
#4The government also extended a bank holiday that was put in place to try to stop a run on the banks. The holiday was supposed to end Monday night. Now, banks will not be opening their doors Tuesday, as planned. There was talk that they might not open Wednesday, either. [...] “As soon as banks in Cyprus reopen, people will rush to take all their money out, because they don’t believe this is a one-off deal,” he said. “…
There was a comment that a lot of russian mob money is held in Cyprus banks. I wonder if this is actually an attack on them in an effort to take the money from the russian mob.
I also predict acts of vandalism on the banks. Where the goal is to cost the banks money to repair their facilities given the situation.
Re: Cypriot Bailout Sends Shivers Throughout the Euro Zone
#5People across Europe will react with horror to this latest development in the Eurozone crisis. This will not strengthen the case for stronger European integration but turn many more against it.
Notice too how the supporters of these measures attempt to frame the debate around wealthy foreign tax evaders while minimizing the plight of ordinary Cypriots.
This extract from an opinion piece in The Guardian says it all
"..the debt burden has been transferred from the banks, where it properly belongs, to households, who had no part in their lending decisions.
As part of that propaganda campaign, the focus has been on Russian oligarchs and tax evaders who have been laundering funds through Cypriot banks. In fact, among those caught in the upper savings bracket are bound to be pensioners for whom this represents their entire life savings, and others who have recently borrowed enough money to buy a modest home. But even if only oligarchs were affected, this is surely an admission of guilt by the European and international authorities, who are responsible for the global regulation of banks and co-ordinating anti-money laundering activities. Their own failure can hardly be a justification for expropriating the small savers of Cyprus."
http://www.guardian.co.uk/commentisfree/2013/mar/17/savers-h...
Re: Cypriot Bailout Sends Shivers Throughout the Euro Zone
#6It's an entire crony bankster program. Those who lent money to Cyprus’s banks by buying their debt rather than by depositing money at the banks, will suffer no losses at all. Those who lent money to the insolvent Cypriot government, will be paid off at 100 cents on the euro. In other words, the banksters are protected. Only depositors with banks will suffer losses in this International Monetary Fund engineered plan. It's as blatant example of who the IMF really works for.
http://www.economicpolicyjournal.com/2013/03/what-to-keep-in...
Re: Cypriot Bailout Sends Shivers Throughout the Euro Zone
#7"After five years of bailouts financed largely by austerity-weary European taxpayers, wealthy nations like Germany and the Netherlands have decreed that from now on when a bank or country fails, it will be bond investors and perhaps even bank depositors who will be forced to pick up a big share of the bill."
This is so incredibly stupid that it would be funny if it wasn't so tragic. They're basically telling everyone in the Eurozone that their money isn't safe in the bank, and that if you want to make sure it keeps being yours you should wthdraw it and move it to a safer place. Either under your mattress or outside of the Eurozone.
They're basically asking for a bankrun across the southern European countries. Didn't any of these geniuses take econ 101?
Re: Cypriot Bailout Sends Shivers Throughout the Euro Zone
#8"After five years of bailouts financed largely by austerity-weary European taxpayers, wealthy nations like Germany and the Netherlands have decreed that from now on when a bank or country fails, it will be bond investors and perhaps even bank depositors who will be forced to pick up a big share of the bill. " This is so incredibly stupid that it would be funny if it wasn't so tragic. They're basically telling everyon…
It's just another example of what's fundamentally wrong with the Euro. If you compare to the US, which is a continent sized country with a lot of diversity, you'll see some big differences. For one, the economic differences between regions in the US aren't nearly as large as in the eurozone. For another, the authority which regulates currency is also in control of taxation and government spending at a federal level, unlike the EU. Also, everyone in the US is subject to the same federal banking regulations and enjoys FDIC insured deposits. In the eurozone you have a hodgepodge with a currency system overlaid, and then when some financial crisis happens the whole system breaks down.
Re: Cypriot Bailout Sends Shivers Throughout the Euro Zone
#9They can't reopen the banks without limiting the amount of money people can withdraw. Thus the death spiral of the entire worldwide financial system begins.
History will record that the grand collapse started with Cyprus.
Re: Cypriot Bailout Sends Shivers Throughout the Euro Zone
#10It would be pretty ironic if the Cyprus bailout of 2013 will noted in history books as the event that lead to the collapse of 21st century banking (next up bank runs). Is it probable? No. Is it possible? Maybe.