Britannia Radio

The latest developments coming out of Cyprus might not seem overly dramatic: swapping the abstract, shared liability of taxpayer money for a more direct one in bank savings accounts. But in this small policy pivot lies the seed for a new and potentially ruinous fear that could spread through the peripheral European markets. Is this email not displaying correctly? View it in your browser. For the full article text, please visit:  http://www.geopoliticalmonitor.com/introducing-the-latest-euro-zone-contagion-cyprus-4792/ Introducing the Latest Euro Zone Contagion: Cyprus By: Zachary Fillingham March 11th, 2013 The latest developments coming out of Cyprus might not seem overly dramatic: swapping the abstract, shared liability of taxpayer money for a more direct one in bank savings accounts. But in this small policy pivot lies the seed for a new and potentially ruinous fear that could spread through the peripheral European markets. There is a simple logic underpinning the Cyprus bailout: Cypriot banks engaged in risky lending in the lead-up to 2008 and they should be punished for it. The only problem is that they can’t be punished too rigorously or they risk toppling over, taking the economy of Cyprus and, to a certain extent, Europe along with them. Once more we come up against the increasingly familiar refrain that Cypriot banks are ‘too big to fail.’ In an effort to resolve this contradiction, the Troika has agreed to impose a direct levy on Cypriot bank customers in exchange for a $13 billion bailout. The levy amounts toa one-time fee of 6.75% on deposits under the 100,000 euros and 9.9% on deposits over 100,000. All affected bank depositors will be compensated with shares of their bank, and some banks are offering rewards for customers who keep their deposits in place over the next two years. For the full article text, please visit:  http://www.geopoliticalmonitor.com/introducing-the-latest-euro-zone-contagion-cyprus-4792/