Last minute bailout of Cyprus. Restructure the bank. Big depositors lose out (could lose up to 40% of their deposits).
Small depositors saved by the insurance. Is the insurance company strong enough to compensate?
What is the repercussion to the other global financial institutions?
In my humble opionion, Euro will fall further against major currencies.
(26-03-2013, 02:49 PM)a74henry Wrote: [ -> ]Last minute bailout of Cyprus. Restructure the bank. Big depositors lose out (could lose up to 40% of their deposits).
Small depositors saved by the insurance. Is the insurance company strong enough to compensate?
What is the repercussion to the other global financial institutions?
In my humble opionion, Euro will fall further against major currencies.
Bank deposits are insured by the government. In the case of Cyprus the government is getting money from 2 sources: the bailout package, and the large depositors.
Other financial institutions will see their cost of funding change. The strong ones will see their cost decline, the weak ones will see their cost increase. Just like how Germany now borrows much more cheaply than Greece, whereas before the difference was quite small.
(26-03-2013, 06:00 AM)HitandRun Wrote: [ -> ] (25-03-2013, 11:15 PM)Bibi Wrote: [ -> ] (25-03-2013, 09:05 PM)HitandRun Wrote: [ -> ]You are funny. Have you taken a look at the Government's balance sheet before? Folks who have never seen the Government's balance sheet and start arguing over it are akin to the 6 blind men arguing over the elephant.
Alot of S-Chips here balance sheet also very very nice leh. I only know Jim Rogers say never trust the govt.
You are funnier. Are you trying to allege things about the accountant general, the auditor general, the government, etc. for false accounting? Extraordinary allegations do need extraordinary evidence.
Incidentally, Jim Rogers says lots of things. Sometimes he's right, sometimes he's wrong. Don't blindly follow what he say, observe what he does. The fact that he is staying in Singapore speak volumes, doesn't it?
(25-03-2013, 10:31 PM)sgd Wrote: [ -> ]you people are really diehards 
So I can take it that you have never seen the government's balance sheet before?
For other folks who might be interested in the government's balance sheet, here's a link:
Statement of Assets and Liabilities - 31 Mar 2012
that balance sheet the portion headlined "investment" can you give a breakdown of what are those investments are in there since you claim you are familiar with it.
everybody waiting for elephant expert to give a response why no response leh
wow. this is rather bleak.
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NICOSIA (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.
" while the rest of their deposits may never be paid back." That's mean the big depositors will be robbed 62.5 % of their deposits ?
(30-03-2013, 11:34 AM)cfa Wrote: [ -> ]" while the rest of their deposits may never be paid back." That's mean the big depositors will be robbed 62.5 % of their deposits ?
sounds like that - unconfirmed though - wait for the official releases...
not much of a good friday for the cypriots...
Also believe the value of the shares issued by the banks will be worth much less than expected.
NICOSIA — 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 yesterday.
Under conditions expected to be announced today, depositors in Bank of Cyprus will get shares in the bank worth 37.5 per cent of their deposits over €100,000 (S$159,000), 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 per cent.
Cypriot President Nicos Anastasiades on Friday defended the €10-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.
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 per cent of deposits over €100,000 will attract no interest, the source said. The remaining 40 per cent will continue to attract interest, but will not be repaid unless the bank does well.
Those with deposits under €100,000 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.
‘CYPRUS EURO’
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 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?” Mr 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. REUTERS