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Savers for Popular Bank of Cyprus (Laiki) just rape by troika
- Thread starter singveld
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Good idea, some chiobus lost their banking jobs and need money.
Can you trust PxP affliated, related & connected organization?? one day, all the contents of your box, will be converted to long term BONDS, 30 years at 4%
The contents of the 'Sinkie box' has already been locked up, restricted and converted long ago.
It's called the Con Pappy Fund Box! LOL
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The rescue of Cyprus won't feel like one to its people
The second largest bank, Laiki, is being closed. Losses from its closure, which will be substantial - billions of euros - will be absorbed by holders of its bonds and those with deposits over 100,000 euros ($130,000; £85,000).
So at a stroke, one important source of credit to the economy will be eliminated.
There is some relief for those with savings of 100,000 euros or less, because their cash will be transferred to the Bank of Cyprus, the country's biggest bank, and kept intact.
But Bank of Cyprus too is being reconstructed. And the costs of making sure it has enough capital to operate safely in the future will also fall on its deposits greater than 100,000 euros. So these depositors too will incur losses running to billions of euros.
In the many months it will take to rehabilitate Bank of Cyprus, the prospects of it providing adequate credit to households and businesses are slim indeed.
Meanwhile, foreign banks operating in Cyprus will probably head for the hills, knowing that an economy already in recession will probably now contract at a rate of knots - causing penury to many.
So, in summary, getting any kind of conventional loan in Cyprus over the next year may be almost impossible.
In the long term as well, prospects for this economy will be extremely challenging: the country's important offshore banking industry, the business of looking after the tax-escaping cash of Russian businesses and individuals, is in effect being closed down forever. All those losses being heaped on large depositors are reason enough for anyone with a choice about where to place their cash to stay away from Cyprus forever.
So here is the Cyprus "rescue" in a nutshell:
An economy that will be starved of credit, and will therefore shrink rapidly and very painfully for citizens
An economy whose main industry, offshore banking, is being shut.
Although there may be some relief that smaller savings no longer face a 6.7% levy, Cypriot citizens may over time end up feeling more than 6.7% poorer as a result of this so-called bailout.
The price for Cyprus of staying in the eurozone will be as great as for the people of any of the currency union's over-indebted nations.
What should give the eurozone's leaders some pause for thought is that at some point the people of countries in financial difficulty may begin to wonder whether they are right to be paying this steep bill to preserve the euro.
The second largest bank, Laiki, is being closed. Losses from its closure, which will be substantial - billions of euros - will be absorbed by holders of its bonds and those with deposits over 100,000 euros ($130,000; £85,000).
So at a stroke, one important source of credit to the economy will be eliminated.
There is some relief for those with savings of 100,000 euros or less, because their cash will be transferred to the Bank of Cyprus, the country's biggest bank, and kept intact.
But Bank of Cyprus too is being reconstructed. And the costs of making sure it has enough capital to operate safely in the future will also fall on its deposits greater than 100,000 euros. So these depositors too will incur losses running to billions of euros.
In the many months it will take to rehabilitate Bank of Cyprus, the prospects of it providing adequate credit to households and businesses are slim indeed.
Meanwhile, foreign banks operating in Cyprus will probably head for the hills, knowing that an economy already in recession will probably now contract at a rate of knots - causing penury to many.
So, in summary, getting any kind of conventional loan in Cyprus over the next year may be almost impossible.
In the long term as well, prospects for this economy will be extremely challenging: the country's important offshore banking industry, the business of looking after the tax-escaping cash of Russian businesses and individuals, is in effect being closed down forever. All those losses being heaped on large depositors are reason enough for anyone with a choice about where to place their cash to stay away from Cyprus forever.
So here is the Cyprus "rescue" in a nutshell:
An economy that will be starved of credit, and will therefore shrink rapidly and very painfully for citizens
An economy whose main industry, offshore banking, is being shut.
Although there may be some relief that smaller savings no longer face a 6.7% levy, Cypriot citizens may over time end up feeling more than 6.7% poorer as a result of this so-called bailout.
The price for Cyprus of staying in the eurozone will be as great as for the people of any of the currency union's over-indebted nations.
What should give the eurozone's leaders some pause for thought is that at some point the people of countries in financial difficulty may begin to wonder whether they are right to be paying this steep bill to preserve the euro.
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Cyprus bailout: Banks to stay closed until Thursday
Earlier, the authorities said all but the biggest two would open on Tuesday.
The central bank now says all will remain closed to ensure the whole banking system functions "smoothly".
The bailout deal will see larger depositors in the two biggest banks, Bank of Cyprus and Laiki, lose money.
President Nicos Anastasiades said "very temporary restrictions" would be put on capital flows, but gave no details.
Controls to prevent money leaving the country are already in place.
Certain limits on the size of cash withdrawals are expected to continue.
'30% losses'
The banks' reopening came after Cyprus agreed a deal with the International Monetary Fund (IMF) and the European Union (EU) that releases 10bn euros in support.
It was conditional on Cyprus itself raising 5.8bn euros, most of which look likely to come from depositors with more than 100,000 euros (£85,000) in Bank of Cyprus and Laiki, known as Popular Bank.
The banks shut a week ago after the country's first money-raising solution, which would have hit smaller deposit holders as well as larger holdings, was rejected.
Laiki will be shut down, and deposits under 100,000 euros, which are guaranteed by the state under EU law, will move into the Bank of Cyprus to create a "good bank".
Deposits above that insured amount will be frozen and used to pay Laiki's debts and recapitalise the Bank of Cyprus, with depositor losses eventually converted into shares.
Major depositors, many of whom are wealthy Russians, will not be able to access accounts exceeding the 100,000-euro limit until the restructuring of the banks is complete.
A government spokesman said the losses on uninsured depositors would be "under or around 30%".
'Specific case'
On Monday morning, hopes that the deal would solve the crisis lifted shares.
But later, stock markets were rocked after the head of the Eurogroup of eurozone finance ministers suggested that the deal for Cyprus model could form a template in any future bailout.
The deal hammered out for Cyprus last night isn't 'fair'. Cyprus has not received the same treatment as other bailed-out eurozone economies”
Jeroen Dijsselbloem, the Dutch finance minister who as head of the Eurogroup played a key role in the Cyprus negotiations, said the deal represented a new template for resolving future eurozone banking problems.
"If there is a risk in a bank our first question should be 'OK, what are you in the bank going to do about that?'," he told Reuters and the Financial Times.
He later added a clarification, saying that Cyprus was "a specific case with exceptional challenges".
Mr Dijsselbloem said the pattern for bank rescues should see shareholders take the first hit, then bondholders, who lend money through financial markets, and only then should depositors with large bank balances be tapped.
The Cyprus deal puts the burden for dealing with problem banks on their shareholders and creditors - in this particular case, customers with large bank balances - rather than the government and taxpayers, or bondholders, who lend through financial markets.
The bailout and rescue of Cyprus by the eurozone and IMF will not feel like much of a rescue to its people, who face economic misery”
The BBC's Andrew Walker points out that the more common approach to failing banks in the current crisis has been for the state to inject new capital.
He says Cyprus's banks are unusual in that they have relatively few financial market investors who could be tapped.
In the past, nations such as Ireland have pumped billions of taxpayers' money into propping up their banks, rather than risk upsetting large investors and spooking the financial system.
The uncertainty over the future of Cyprus in the eurozone was sparked a week ago when its parliament rejected an earlier bailout deal, which also included a controversial bank levy.
Despite the Cypriot economy's relatively small size, many analysts had been concerned that the crisis would spread to the wider eurozone, had Cyprus been forced to give up the single currency.
There were fears that the country's possible exit from the euro would trigger a loss of confidence across the single currency bloc, and prompt investors to withdraw from other troubled economies, such as Greece.
However, while Cyprus is now likely to remain in the eurozone, the country still faces significant obstacles as it attempts to recover from the crisis.
The EU-IMF deal involves a massive restructuring of the Cypriot banking system, as well as austerity measures and tax increases.
There has also been significant public anger in Cyprus at the intervention of European authorities, and the credibility of the Cypriot government has been questioned.
"We see a risk that Cyprus' sovereign debt burden post-bailout might not be sustainable, as the country is likely to enter a deep recession caused by the shrinkage of the banking sector and severe deleveraging," warned Reinhard Cluse, an economist at UBS
Earlier, the authorities said all but the biggest two would open on Tuesday.
The central bank now says all will remain closed to ensure the whole banking system functions "smoothly".
The bailout deal will see larger depositors in the two biggest banks, Bank of Cyprus and Laiki, lose money.
President Nicos Anastasiades said "very temporary restrictions" would be put on capital flows, but gave no details.
Controls to prevent money leaving the country are already in place.
Certain limits on the size of cash withdrawals are expected to continue.
'30% losses'
The banks' reopening came after Cyprus agreed a deal with the International Monetary Fund (IMF) and the European Union (EU) that releases 10bn euros in support.
It was conditional on Cyprus itself raising 5.8bn euros, most of which look likely to come from depositors with more than 100,000 euros (£85,000) in Bank of Cyprus and Laiki, known as Popular Bank.
The banks shut a week ago after the country's first money-raising solution, which would have hit smaller deposit holders as well as larger holdings, was rejected.
Laiki will be shut down, and deposits under 100,000 euros, which are guaranteed by the state under EU law, will move into the Bank of Cyprus to create a "good bank".
Deposits above that insured amount will be frozen and used to pay Laiki's debts and recapitalise the Bank of Cyprus, with depositor losses eventually converted into shares.
Major depositors, many of whom are wealthy Russians, will not be able to access accounts exceeding the 100,000-euro limit until the restructuring of the banks is complete.
A government spokesman said the losses on uninsured depositors would be "under or around 30%".
'Specific case'
On Monday morning, hopes that the deal would solve the crisis lifted shares.
But later, stock markets were rocked after the head of the Eurogroup of eurozone finance ministers suggested that the deal for Cyprus model could form a template in any future bailout.
The deal hammered out for Cyprus last night isn't 'fair'. Cyprus has not received the same treatment as other bailed-out eurozone economies”
Jeroen Dijsselbloem, the Dutch finance minister who as head of the Eurogroup played a key role in the Cyprus negotiations, said the deal represented a new template for resolving future eurozone banking problems.
"If there is a risk in a bank our first question should be 'OK, what are you in the bank going to do about that?'," he told Reuters and the Financial Times.
He later added a clarification, saying that Cyprus was "a specific case with exceptional challenges".
Mr Dijsselbloem said the pattern for bank rescues should see shareholders take the first hit, then bondholders, who lend money through financial markets, and only then should depositors with large bank balances be tapped.
The Cyprus deal puts the burden for dealing with problem banks on their shareholders and creditors - in this particular case, customers with large bank balances - rather than the government and taxpayers, or bondholders, who lend through financial markets.
The bailout and rescue of Cyprus by the eurozone and IMF will not feel like much of a rescue to its people, who face economic misery”
The BBC's Andrew Walker points out that the more common approach to failing banks in the current crisis has been for the state to inject new capital.
He says Cyprus's banks are unusual in that they have relatively few financial market investors who could be tapped.
In the past, nations such as Ireland have pumped billions of taxpayers' money into propping up their banks, rather than risk upsetting large investors and spooking the financial system.
The uncertainty over the future of Cyprus in the eurozone was sparked a week ago when its parliament rejected an earlier bailout deal, which also included a controversial bank levy.
Despite the Cypriot economy's relatively small size, many analysts had been concerned that the crisis would spread to the wider eurozone, had Cyprus been forced to give up the single currency.
There were fears that the country's possible exit from the euro would trigger a loss of confidence across the single currency bloc, and prompt investors to withdraw from other troubled economies, such as Greece.
However, while Cyprus is now likely to remain in the eurozone, the country still faces significant obstacles as it attempts to recover from the crisis.
The EU-IMF deal involves a massive restructuring of the Cypriot banking system, as well as austerity measures and tax increases.
There has also been significant public anger in Cyprus at the intervention of European authorities, and the credibility of the Cypriot government has been questioned.
"We see a risk that Cyprus' sovereign debt burden post-bailout might not be sustainable, as the country is likely to enter a deep recession caused by the shrinkage of the banking sector and severe deleveraging," warned Reinhard Cluse, an economist at UBS
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After their bank closed for 10 days, they are going to open on thursday with daily limit of 300 Euro. If you are in singapore, can you survive if the bank closed for 10 days ?
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Cyprus banks to reopen on Thursday
Banks in Cyprus are to reopen on Thursday at 10:00 GMT, 10 days after they closed to prevent a bank run as a controversial bailout was negotiated.
Banks will open their doors between noon and 18:00 local time, the Cypriot central bank said.
Customers will also be limited to withdrawing 300 euros ($383; £253) a day, to prevent everyone fleeing with their savings.
Earlier, the boss of the Bank of Cyprus was sacked.
"I am telling you that all banks are definitely going to open tomorrow," the Cypriot central bank's Aliki Stylianou said, which comes after several false announcements of when bank customers will be able to access their funds.
Capital controls are to be imposed as Cyprus seeks to raise 5.8bn euros to qualify for a 10bn-euro bailout from the European Union, European Central Bank and the International Monetary Fund, the so-called troika.
Cyprus Finance Minister Michalis Sarris announced a long-awaited series of capital controls, including the 300-euro daily withdrawal, and no cheques can be cashed.
He cited the "lack of substantial liquidity and significant risk of deposits outflow, with possible outcome the collapse of the credit institutions" as the reasons for the restrictions.
40% losses
Depositors in Cypriot banks with more than 100,000 euros could see 40% of their funds converted into bank shares, while those with less than 100,000 euros will not lose any funds - but face limits on what funds they can access.
Speaking to the Financial Times, Mr Sarris said that the controls would be reviewed after seven days, and that some banks could be exempted altogether.
According to newspaper report, Cypriots will be prohibited from taking more than 3,000 euros in cash abroad on each trip, and limited to spending 5,000 euros on their credit or debit card.
Concern about the ongoing situation in Cyprus has continued to weigh on the Athens stock market, with Greek shares ending down 4% on Wednesday.
Bank merger
Bank of Cyprus chief executive Yiannis Kypri confirmed he had been removed as head of the bank, which is the country's largest commercial lender.
Reuters reported that Mr Kypri had issued a statement about his removal, which said: "The reason I was given was that, based on the resolution decree recently passed by parliament, and upon demands of the troika, an administrator had been appointed at the Bank.
"Until now I have not received a formal letter from the governor of the Central Bank on the matter."
A European Commission spokesman denied that the troika had demanded Mr Kypri's removal.
The BBC's Paul Mason: "Every figure in this document has the word 'euro' and two x's"
"These reports are not correct and decisions like this would in any case be the responsibility of the Bank of Cyprus," a Commission spokesman said.
An administrator has been appointed to Bank of Cyprus to restructure the bank. It is being merged with the "good" parts of the failed Laiki Bank, which will be closed down.
Bank of Cyprus chairman Andreas Artemis handed in his resignation on Tuesday, along with four other directors, but the bank's board rejected the resignations.
Now Panicos Demetriades, the central bank governor, has sacked the entire board, according to the Cyprus News Agency.
Demonstrations
Mr Demetriades was widely criticised on Tuesday for suggesting that Bank of Cyprus was going to be wound up in the same way as is planned for Laiki Bank.
His comments led to demonstrations, calls for his resignation from Bank of Cyprus staff, and a hastily-drafted denial from Finance Minister Michalis Sarris.
Mr Demetriades said "superhuman" efforts were being made to get the banks ready for reopening on Thursday.
"Indications are that banks will open tomorrow with some restrictions on capital," said central bank spokeswoman Aliki Sylianou, speaking to the country's state broadcaster on Wednesday.
The banks have been shut since 15 March while the controversial 10bn-euro bailout was being negotiated.
---------------------------------------------------------------------------------------------------------------------------------
Cyprus banks to reopen on Thursday
Banks in Cyprus are to reopen on Thursday at 10:00 GMT, 10 days after they closed to prevent a bank run as a controversial bailout was negotiated.
Banks will open their doors between noon and 18:00 local time, the Cypriot central bank said.
Customers will also be limited to withdrawing 300 euros ($383; £253) a day, to prevent everyone fleeing with their savings.
Earlier, the boss of the Bank of Cyprus was sacked.
"I am telling you that all banks are definitely going to open tomorrow," the Cypriot central bank's Aliki Stylianou said, which comes after several false announcements of when bank customers will be able to access their funds.
Capital controls are to be imposed as Cyprus seeks to raise 5.8bn euros to qualify for a 10bn-euro bailout from the European Union, European Central Bank and the International Monetary Fund, the so-called troika.
Cyprus Finance Minister Michalis Sarris announced a long-awaited series of capital controls, including the 300-euro daily withdrawal, and no cheques can be cashed.
He cited the "lack of substantial liquidity and significant risk of deposits outflow, with possible outcome the collapse of the credit institutions" as the reasons for the restrictions.
40% losses
Depositors in Cypriot banks with more than 100,000 euros could see 40% of their funds converted into bank shares, while those with less than 100,000 euros will not lose any funds - but face limits on what funds they can access.
Speaking to the Financial Times, Mr Sarris said that the controls would be reviewed after seven days, and that some banks could be exempted altogether.
According to newspaper report, Cypriots will be prohibited from taking more than 3,000 euros in cash abroad on each trip, and limited to spending 5,000 euros on their credit or debit card.
Concern about the ongoing situation in Cyprus has continued to weigh on the Athens stock market, with Greek shares ending down 4% on Wednesday.
Bank merger
Bank of Cyprus chief executive Yiannis Kypri confirmed he had been removed as head of the bank, which is the country's largest commercial lender.
Reuters reported that Mr Kypri had issued a statement about his removal, which said: "The reason I was given was that, based on the resolution decree recently passed by parliament, and upon demands of the troika, an administrator had been appointed at the Bank.
"Until now I have not received a formal letter from the governor of the Central Bank on the matter."
A European Commission spokesman denied that the troika had demanded Mr Kypri's removal.
The BBC's Paul Mason: "Every figure in this document has the word 'euro' and two x's"
"These reports are not correct and decisions like this would in any case be the responsibility of the Bank of Cyprus," a Commission spokesman said.
An administrator has been appointed to Bank of Cyprus to restructure the bank. It is being merged with the "good" parts of the failed Laiki Bank, which will be closed down.
Bank of Cyprus chairman Andreas Artemis handed in his resignation on Tuesday, along with four other directors, but the bank's board rejected the resignations.
Now Panicos Demetriades, the central bank governor, has sacked the entire board, according to the Cyprus News Agency.
Demonstrations
Mr Demetriades was widely criticised on Tuesday for suggesting that Bank of Cyprus was going to be wound up in the same way as is planned for Laiki Bank.
His comments led to demonstrations, calls for his resignation from Bank of Cyprus staff, and a hastily-drafted denial from Finance Minister Michalis Sarris.
Mr Demetriades said "superhuman" efforts were being made to get the banks ready for reopening on Thursday.
"Indications are that banks will open tomorrow with some restrictions on capital," said central bank spokeswoman Aliki Sylianou, speaking to the country's state broadcaster on Wednesday.
The banks have been shut since 15 March while the controversial 10bn-euro bailout was being negotiated.
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This whole Cyprus bailout has been handled badly by everyone involved. Even with capital controls in place, there will still be a run on the banks. Expect to see long queues tomorrow when the banks reopen.
The EU have f**ked the Cypriot government and the government and f**ked the people.
Things are looking grim in Cyprus for the foreseeable future.
The EU have f**ked the Cypriot government and the government and f**ked the people.
Things are looking grim in Cyprus for the foreseeable future.
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Anyone notice that all the financial centres are collapsing one by one?
it started with new York, london............
it started with new York, london............
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Yiannis Paraskevas Ioannau
Cypriot resident, Larnaca
Across the street from my office is a branch of the Bank of Cyprus. It's now one hour before it's due to open and there's a small line of people arriving to queue. I would like to withdraw my money altogether. I don't have a huge amount and I lose with the "haircut", but I don't trust the banks or the government.
Money in a bank is supposed to be safe and that's not the case here. We are at the mercy of the EU and are trapped in the euro as it's too painful to get out. Everyone is furious because we feel that we are being robbed at gunpoint by the Europeans. It all started when Cyprus agreed to switch to the euro. As a nation we cannot compete with Germany economically. Germany is much more efficient than any other country in Europe.
The Europeans are not really interested in saving Cyprus. They are simply trying to save themselves. The answer is to drop the euro and return to the pound. This will be painful but at least there will be light at the end of the tunnel. Right now I see none
Cypriot resident, Larnaca
Across the street from my office is a branch of the Bank of Cyprus. It's now one hour before it's due to open and there's a small line of people arriving to queue. I would like to withdraw my money altogether. I don't have a huge amount and I lose with the "haircut", but I don't trust the banks or the government.
Money in a bank is supposed to be safe and that's not the case here. We are at the mercy of the EU and are trapped in the euro as it's too painful to get out. Everyone is furious because we feel that we are being robbed at gunpoint by the Europeans. It all started when Cyprus agreed to switch to the euro. As a nation we cannot compete with Germany economically. Germany is much more efficient than any other country in Europe.
The Europeans are not really interested in saving Cyprus. They are simply trying to save themselves. The answer is to drop the euro and return to the pound. This will be painful but at least there will be light at the end of the tunnel. Right now I see none
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only 50k? a bit meow for such a rich gov.
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The Swedes and the Brits really made a wise decision not to adopt the euro. This fiasco in Cyprus is the beginning of the end for the single currency.
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