Big depositors in Cyprus to lose far more than feared
By Michele Kambas
By Michele Kambas
NICOSIA | Fri Mar 29, 2013 4:16pm ED
(Reuters) - Big depositors in Cyprus's largest bank stand to lose far more than initially feared under a European Union rescue package to save the island from bankruptcy, a source with direct knowledge of the terms said on Friday.
Under conditions expected to be announced on Saturday, depositors in Bank of Cyprus will get shares in the bank worth 37.5 percent of their deposits over 100,000 euros, the source told Reuters, while the rest of their deposits may never be paid back.
The toughening of the terms will send a clear signal that the bailout means the end of Cyprus as a hub for offshore finance and could accelerate economic decline on the island and bring steeper job losses.
Officials had previously spoken of a loss to big depositors of 30 to 40 percent.
Cypriot President Nicos Anastasiades on Friday defended the 10-billion euro ($13 billion) bailout deal agreed with the EU five days ago, saying it had contained the risk of national bankruptcy.
"We have no intention of leaving the euro," the conservative leader told a conference of civil servants in the capital, Nicosia.
"In no way will we experiment with the future of our country," he said.
Cypriots, however, are angry at the price attached to the rescue - the winding down of the island's second-largest bank, Cyprus Popular Bank, also known as Laiki, and an unprecedented raid on deposits over 100,000 euros.
Under the terms of the deal, the assets of Laiki bank will be transferred to Bank of Cyprus.
At Bank of Cyprus, about 22.5 percent of deposits over 100,000 euros will attract no interest, the source said. The remaining 40 percent will continue to attract interest, but will not be repaid unless the bank does well.
Those with deposits under 100,000 euros will continue to be protected under the state's deposit guarantee.
Cyprus's difficulties have sent jitters around the fragile single European currency zone, and led to the imposition of capital controls in Cyprus to prevent a run on banks by worried Cypriots and wealthy foreign depositors.
Banks reopened on Thursday after an almost two-week shutdown as Cyprus negotiated the rescue package. In the end, the reopening was largely quiet, with Cypriots queuing calmly for the 300 euros they were permitted to withdraw daily.
The imposition of capital controls has led economists to warn that a second-class "Cyprus euro" could emerge, with funds trapped on the island less valuable than euros that can be freely spent abroad.
Anastasiades said the restrictions on transactions - unprecedented in the currency bloc since euro coins and banknotes entered circulation in 2002 - would be gradually lifted. He gave no time frame but the central bank said the measures would be reviewed daily.
He hit out at banking authorities in Cyprus and Europe for pouring money into the crippled Laiki.
"How serious were those authorities that permitted the financing of a bankrupt bank to the highest possible amount?" Anastasiades said.
The president, barely a month in the job and wrestling with Cyprus's worst crisis since a 1974 war split the island in two, accused the 17-nation euro currency bloc of making "unprecedented demands that forced Cyprus to become an experiment".
European leaders have insisted the raid on big bank deposits in Cyprus is a one-off in their handling of a debt crisis that refuses to be contained.
But policymakers are divided, and the waters were muddied a day after the deal was inked when the Dutch chair of the euro zone's finance ministers, Jeroen Dijsselbloem, said it could serve as a model for future crises.
Faced with a market backlash, Dijsselbloem rowed back. But on Friday, European Central Bank Governing Council member Klaas Knot, a fellow Dutchman, said there was "little wrong" with his assessment.
"The content of his remarks comes down to an approach which has been on the table for a longer time in Europe," Knot was quoted as saying by Dutch daily Het Financieele Dagblad. "This approach will be part of the European liquidation policy."
The Cyprus rescue differs from those in other euro zone countries because bank depositors have had to take losses, although an initial plan to hit small deposits as well as big ones was abandoned and accounts under 100,000 euros were spared.
Warnings of a stampede at Cypriot banks when they reopened on Thursday proved unfounded.
For almost two weeks, Cypriots were on a ration of limited withdrawals from bank cash machines. Even with banks now open, they face a regime of strict restrictions designed to halt a flight of capital from the island.
Some economists say those restrictions will be difficult to lift. Anastasiades said the capital controls would be "gradually eased until we can return to normal".
The government initially said the controls would stay in place for seven days, but Foreign Minister Ioannis Kasoulides said on Thursday they could last "about a month".
On Friday, easing a ban on cheque payments, Cypriot authorities said cheques could be used to make payments to government agencies up to a limit of 5,000 euros. Anything more than 5,000 euros would require Central Bank approval.
The bank also issued a directive limiting the cash that can be taken to areas of the island beyond the "control of the Cypriot authorities" - a reference to Turkish-controlled northern Cyprus which considers itself an independent state. Cyprus residents can take 300 euros; non-residents can take 500.
Under the terms of the capital controls, Cypriots and foreigners are allowed to take up to 1,000 euros in cash when they leave the island.
(Additional reporting by Ivana Sekularac and Gilbert Kreijger in Amsterdam; Writing by Matt Robinson; Editing by Giles Elgood)
FARAGE WAS RIGHT:
FARAGE WAS RIGHT:
FDIC Insurance Coverage Basics
The FDIC – short for the Federal Deposit Insurance Corporation – is an independent agency of the United States government. The FDIC protects depositors of insured banks located in the United States against the loss of their deposits if an insured bank fails.
Any person or entity can have FDIC insurance coverage in an insured bank. A person does not have to be a U.S. citizen or resident to have his or her deposits insured by the FDIC.
FDIC insurance is backed by the full faith and credit of the United States government. Since the FDIC began operations in 1934, no depositor has ever lost a penny of FDIC-insured deposits.
What does FDIC deposit insurance cover?
FDIC insurance covers all types of deposits received at an insured bank, including deposits in a checking account, negotiable order of withdrawal (NOW) account, savings account, money market deposit account (MMDA), time deposit such as a certificate of deposit (CD), or an official item issued by a bank (such as a cashier's check or money order).
FDIC insurance covers depositors’ accounts at each insured bank, dollar-for-dollar, including principal and any accrued interest through the date of the insured bank’s closing, up to the insurance limit.
The FDIC does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities or municipal securities, even if these investments are purchased at an insured bank.
The FDIC does not insure safe deposit boxes or their contents.
The FDIC does not insure U.S. Treasury bills, bonds or notes, but these investments are backed by the full faith and credit of the United States government.
Cyprus has excellent location, great weather, fertile land, reliable legal and political systems, an educated labour force. It should hold a referendum, leave the Eurozone and foreign capital from everywhere (Middle East to Russia) will flock in.
The Eurozone government assigned 0% capital requirement to Greek government bonds thereby encouraging banks to pile on. The message clearly was that "Greek government bonds are risk free", so people bought the bonds and got screwed. Of course in hindsight they should not have bought them, but that is hindsight!
When 10Y Italy was trading only 0.3% above 10Y German government bonds, in 2007, people thought Italy was cheap! Then all these governments started to fall, one after another, and these governments are now innocent and Cyprus has only itself to blame!? Fine, hold a referendum and leave this dysfunctional monetary union. Cyprus has everything it needs to be a healthy and an independent country.
Maybe I’ll get a good deal on a villa in Aphrodite Hills.Delete
I suggest "renting."Delete
Of course, owning only makes you a potential target,Delete
Besides there are too many places to go to next time.Delete
Yep, "so many disasters, so little time." :)Delete
The Eurozone. I don't get. I've never "got it," and, obviously, I never will. It's madness.ReplyDelete
Oh, well, on to something I do "get."ReplyDelete
What has the wingspan of a 747, weighs no more than a small car and can fly day and night without ever refueling? I learned the answer to those questions yesterday at a press conference held at Moffett Field outside San Francisco for the Solar Impulse solar-powered airplane.
Read more at http://cleantechnica.com/2013/03/30/solar-impulse-across-america-solar-powered-flight-coming-soon-to-an-airport-near-you/#4Qi9zOHc48DJHWRO.99
You're, basically, looking at drones that can stay aloft for years.
All they need now is a jet engine that's light enough to get above the "weather," I guess.Delete
I’ll post that on the next post unless of course the Norks disappear themselves or Mordor on the Po.Delete
This crisis will force them to end it or try to expand and centralize control. It probably 55 : 45 that they will further centralization, with some drop outs.ReplyDelete
I guess, but I'll be damned if I can understand why any country, other than Germany (maaaybe, France,) would want to stay in.Delete
maaaaaaybe, The NetherlandsDelete
The Trade Pact was a damned good idea. But, the common currency was insanity n'thed.Delete
Stupid-Ass Brits stayed with the Pound.Delete
Those Brits stay with socialized healthcare, too.Delete
It is the politicians of course, they get salaries and pensions on German schnitzel sizes instead of Italian or Spanish tapas portions.ReplyDelete
They'll be damned lucky if they don't all get hung with German rope.Delete
The Germans are repatriating their gold. Eventually, they'll just go ahead and loose the Tiger Tanks one more time.Delete
Of course, so is Texas. :) Yikes.Delete
In the biggest drought in 75 years, ethanol is still selling for $0.80/gallon less than gasoline.ReplyDelete
I wonder what the spread will be when the drought breaks?
I've been up here around Pueblo Colorado for the past month, talk about dry ....ReplyDelete
Down in the desert, drought is a given, but up here, it is devastating to the local economy, fer sur.
This guy talked about John Kyl and Big Oil, 'Rat:ReplyDelete
Magic Johnson Quarantined for Life!
The Gay Plague
by Todd Fahey
WARNING:: This article deals with the offensive practices of the homosexual community, which may be disturbing to some readers.
"Homosexual men are probably the dirtiest, filthiest people on the face of the earth...No other people, to my knowledge, so vigorously and deliberately expose themselves to so much secretia, excretia, urine and everything else secreted by the human body," writes Dr. Paul Cameron, Director of the Institute for the Investigation of Sexuality.
The issue is AIDS; the problem is its dramatic increase; the cure is unknown. Had AIDS remained confined to homosexuals and needle addicts, there would be little cause for complaint. On the contrary, such moral decay must be punished, and AIDS seems quite a suitable punishment.
The scary truth is, that this ravaging virus is spreading amongst the straight populace, via prostitution and blood transfusions. There is no guarantee that a husband will not pass AIDS onto his wife after a fling with a convention call girl. Or that, after a car accident, an AIDS-contaminated blood transfusion won't flow through your own veins.
What can be done to stop this plague? The answer is painfully simple: Remove the source. Quarantine all AIDS sufferers until cure or death.
"Quarantines have been very effective in beating outbreaks of scarlet fever, smallpox and typhoid in this century," writes Richard Restek, in a Washington Post article. So, why should AIDS be treated any differently? Is it not just as deadly? Just as infectious? WHY ARE WE STALLING?
According to Congressman William J. Dannemeyer (R-CA), that answer lies in the House Subcommittee on Health and the Environment, chaired by Henry Waxman (D-CA). Waxman has consistently refused to hear Dannemeyer's proposals to close down bathhouses and quarantine detected AIDS sufferers. The deeper truth is the Homosexual Lobby's powerful influence on Rep. Waxman's re-election campaigns, to which it contributes heavily.
The Republican party must stand firm for traditional family values and reject the bizarre and reprehensible practices of the homosexual community. In addition, Rep. Dannemeyer's proposal for quarantine should be adopted at the state and federal levels, to protect against a disease to which not even the celibate are immune.
Kyl retired, was replaced by a Flake.Delete
Jeff is both figuratively and literally a Flake
approximately 1.2 million (1,178,350) adults and adolescents who were living with HIV infection at the end of 2008, the most recent year for which national prevalence estimates are available. The impact of the HIV/AIDS epidemic spans the nation with HIV diagnoses having been reported in all 50 states, the District of Columbia, and the U.S. dependencies, possessions, and associated nations.Delete
CDC estimates that more than one million people are living with HIV in the U.S.. One in five (20%) of those people living with HIV is unaware of their infection.
Let's see, this new GOP proposal would ...
require Federal detention centers for another million folks.
Blood screening for the entire 330 million people residing in the US.
It's a proposal ObamaCare Plus.
...I think it's an OLD proposal, but I have yet to read the whole damned thing, 'probly never will, since sleep seems more valuable.Delete
I grabbed up a Republican computer log, looked at it for a minute. Then something happened. One of those fluke/luck turns-of-the-screw. Rodgers. Lincoln Avenue. Could it be? Sam Rodgers, mellow-Marlboro guardian of a savage London acid-trip?ReplyDelete
"Hello, Rodgers' residence. This is Sam."
"Mr. Rodgers, this is Todd Fahey..."
"Todd!!! How the fuck'reyoudoing?"
"O.K...Sam. I'm calling for John Conlan. If that name is familiar to you, it should be..."
"Todd, what's going on?"
"Yes, Sam, he was quite the Titan in Congress. I'm glad you recognized that. And, well, he's running again..."
"How've you been?"
"Do we really need another Lobbyist in Washington? Or an inexperienced lawyer? Well, that's what we'll have, if either Jon Kyl or Mark Dioguardi ferret their way into office..."
"Fuck the lobbyists? Yes, that's right. Who needs them? So...you'll be voting for John, come September 12? Wonderful. I'll tell him as soon as he comes back from a Middle East fact-finding mission..."
"Yes, ho ho, he's quite the globe-trotter. Nobody knows those scurvy Arabs better than John, if you know what I'm saying..."
"And you have a good evening, too."
Virginia stared at me, an eyelid twitching out of sync. "Uhh..." she mumbled, "whatever gets the votes, I guess. Right, Todd?"
"I think that's the best policy, Virginia," I said, smiling professionally, as my heart did a little stutter-step.
She got up and shook her head, walked away, and I crumpled the script and gave it a Lakers-quality skyhook into the circular file.
"secretia, excretia, urine and everything else secreted by the human body"ReplyDelete
Precious bodily fluids in Strangelove's Book.
This comment has been removed by a blog administrator.ReplyDelete
This comment has been removed by a blog administrator.ReplyDelete
This comment has been removed by a blog administrator.ReplyDelete
The more I think about this story, I believe that the real big money must have got their money out of the banks and the Eu has to confiscate a greater percentage of what is left. How can there not be runs on other banks in Italy, Spain, Ireland and France?ReplyDelete
Google has the picture of Caesar Chavez up in place of the “O”.ReplyDelete
Happy Easter, Everyone!ReplyDelete
Looks like Deuce had to remove the Egg from Bob's face about 3 times.ReplyDelete
Caller on the radio is a dad with a son in Afghanistan.ReplyDelete
Son said a General stopped by one day and awarded them all a medal.
Before he left, someone else collected the medals again, saying:
You can buy these for 2-3 dollars at the PX when you get back!
...don't be silly: A necessity because of the Draconian Cuts due to The Sequester!
The thought of the General paying for them himself never crossed his mind, evidently.
Hellо Theгe. I found уour blog using mѕn.ReplyDelete
Thіs iѕ an eхtremely well written аrticle.
I'll make sure to bookmark it and return to read more of your useful information. Thanks for the post. I'll сеrtainly comеbacκ.
my web pagе: skin lightening