Faisal Islam‏@faisalislam12 min
Pissarides: have to think of the whole economy… Looks like we get a compromise tonight or tomorrow morning. Not going to be a good one
Faisal Islam‏@faisalislam13 min
Pissarides: 2 biggest banks lost money in Greek debt. Caused to a large extent by haircut. so capitalise from ESM
Faisal Islam‏@faisalislam14 min
Pissarides: decision has to be reached today or tomorrow. Accept haircut,
Comic interlude time from Buffett’s rating agency: MOODY’S DOWNGRADES CYPRIOT BANKS’ DEPOSIT, SR DEBT
Gets better and better – Cyprus govt official tells journalists outside parliament Troika wants 15% levy on deposits in all Cypriot banks.
The depositor losses are increasing by the second. They’re talking 50% and 40% loss ….will probably be 100% by the time they’re done.
“Even if an emergency bank restructure – which could mean big deposit holders losing almost half of their savings – goes ahead, Cyprus will need to raise billions by next week to avoid collapse.”
Insured deposits – below the EU ceiling of 100,000 euros, supposedly guaranteed in the event of a bank collapse – would go into a ‘good bank’ and not sustain losses, while uninsured deposits would go into the bad bank and be frozen until assets could be sold. Losses to depositors could reach 40 per cent.
John Cridland, director-general of the Confederation of British Industry, said last night that the proposal for a levy on bank deposits in Cyprus had ‘created a real mess’ and ‘undermined the confidence of ordinary depositors’.
He added: ‘The events are a stark reminder that not only has the eurozone crisis not gone away but also how much Europe and the eurozone countries in particular, are going through a period of rapid transformation.’
Cyprus Officially Passes Capital Controls Into Law
While it is unknown if the Cypriot parliament will agree to, and enact into law, the Troika-demanded deposit haircuts, after the shocking vote of mutiny against Merkel earlier this week that saw not one politician vote for the Europe suggested deposit tax levy (and even the ruling party abstained), a vote which will once more take place tomorrow, moments ago Cyprus became the first Eurozone country to officially implement governmental capital controls into legislation. At this point it had no choice: whatever happens with the deposit haircut, or with everything else, it is now inevitable that the local Cypriots will do all they can to pull as much money from domestic banking system as possible following the complete loss of faith and trust in banks, which is why the government had no choice but to intervene with its own “controls.” Sadly, this marks a milestone in the development of the Eurozone – it’s all downhill, and accelerating, from here.
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