If Cyprus can dip into people’s private savings, how safe are we?
Cyprus is a tiny island nation with an economy to match but the government’s plan announced over the weekend to dip into the bank deposits of its citizens in a “one-off” move to help pay for a bailout has sent a tremor through global markets.
Cyprus is admittedly an unusual case due to the extent of its difficulties and the large proportion of offshore depositors. But the question is, if Cyprus can do this, what about other countries?
According to Moody’s, it’s time to start worrying.
“Even if the risks of contagion in this case are limited… the decision to impose losses on depositors signals euro area policymakers’ willingness to risk triggering wider financial market disruption in pursuit of other policy goals,” the rating agency said in a report Monday.
In other words, the cat is out of the bag.
http://financialpostbusiness.files.wordpress.com/2013/03/cyprus-bailout.gif?w=620
http://business.financialpost.com/2013/03/18/if-cyprus-can-dip-into-peoples-private-savings-how-safe-are-we/
Step right up: Cypriot President touts gas deal for bank customers
http://www.theglobeandmail.com/report-on-business/economy/economy-lab/step-right-up-cypriot-president-touts-gas-deal-for-bank-customers/article9926630/
Euro crisis: Why a Cyprus bailout must be seen as 'fair'
As Europe tackles its latest euro crisis, a Cyprus bailout deal must follow the path of being perceived as 'fair.' A tax on small-time savers isn't seen that way.
http://www.csmonitor.com/Commentary/the-monitors-view/2013/0318/Euro-crisis-Why-a-Cyprus-bailout-must-be-seen-as-fair
German parties slam Cyprus deal, Schaeuble deflects blame
Leading figures from across the German political spectrum criticised Europe's bailout deal for Cyprus on Monday, describing plans to impose a levy on small savers in the Mediterranean island's banks as a major mistake.
Finance Minister Wolfgang Schaeuble, who represented Germany in the rescue talks in Brussels, tried to deflect blame for the agreement however, saying it was "not the creation" of the German government and that he was open to changes
http://uk.reuters.com/article/2013/03/18/uk-eurozone-cyprus-germany-idUKBRE92H0GI20130318
Cyprus bail-out: European leaders scrambling to amend planned tax on bank deposits
European finance ministers have urged Cyprus to exempt small savers from a planned tax on bank deposits after the prospect panicked markets and prompted a Russian threat to withdraw financial aid.
http://www.telegraph.co.uk/news/worldnews/europe/cyprus/9938793/Cyprus-bail-out-European-leaders-scrambling-to-amend-planned-tax-on-bank-deposits.html
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