Cyprus-Forum.com

[cyprusgrump]

What capital controls mean

We now have details of the 'capital controls' which Cyprus intends to vote into law (sometime) today, thanks to star blogger @YiannisMouzakis:

It's a remarkable set of restrictions on the usual nuts and bolts of the financial system - particularly given the final point:

Restrictions in daily withdrawals
Ban on premature termination of time savings deposits
Compulsory renewal of all time savings deposits upon maturity
Conversion of current accounts to time deposits
Ban or restrictions on non cash transactions
Restrictions on use of debit, credit or prepaid debit cards
Ban or restriction on cashing in checks
Restrictions on domestic interbank transfers or transfers within the same bank
Restrictions on the interactions/transactions of the public with credit institutions
Restrictions on movements of capital, payments, transfers
Any other measure which the Finance Minister or the Governor of Cyprus Central Bank see necessary for reasons of public order and safety

so has all money in a current account been seized ?

I read what is in red as the seizure of all money in current accounts, the accounts have been converted to time deposit account, you can not end a time deposit account early, and the time deposit account is automatically renewed. They have stolen 100% of peoples money.

Agreed - that is how I read it too...

for reasons of public order and safety

as far as i see it, they have just created a very dangerous situation, this is pure provocation, what are they farking thinking off, my mums out there, and now I'm worried, what the fark do you buy food with, Cyprusgrump, forgive for questioning this, but how certain are you of this info, because if it is true the shit is about to hit the fan, big time.

Government spokesman: next few hours will determine our fate

Cyprus's top government spokesman has told reporters that 'the next few hours' will determine the future of the country, as rumour swirls over its latest plans for a bailout (see 10.43am)

Christos Stylianides added that MPs will have to take "difficult decisions" later today, now that legislation to impose capital controls and split Laiki Bank have been submitted to parliament.

Here's the full statement:
Statement by the Government Spokesman, Mr Christos Stylianides

The President of the Republic and the Government are in hard negotiations with Troika in order to conclude to solutions that will save the banking system, the economy in general and will bring back calmness in the country. During these really critical hours, everyone must demonstrate the highest level of responsibility.

The President of the Republic, as he mentioned during his address to the nation, assumed a high political cost and accepted the deal with the Eurogroup for the stability levy, despite his disagreements, bearing in mind the social misery that a possible rejection of the proposal would cause.

In a few hours we will be called upon to take the big decisions and reply to the hard dilemmas.

The Government has already submitted the bills. The philosophy through which it is trying to find the best possible solution, under the given circumstances, is already known.The House of Representatives will soon be called upon to take the big decisions.Undoubtedly, there will also be painful aspects in any decision taken, but the country must be saved.

The political leadership must, despite the different ideological and political approaches,provide the way out. The President of the Republic as the guardian of unity kept the political leadership constantly briefed and respected the decision of the House of Representatives. Through the continuous meetings with the party leaders he aimed at collective wisdom.
The next few hours will determine the future of this country. We must all assume our responsibility.

[end]

[cyprusgrump]

Greece takes control of Cyprus banks' Greek assets

Greek banks are taking control of the branches and assets of Cypriot banks based in Greece, following a deal hammered out between the two countries, and announced in the last few minutes.

This was one element of the original bailout deal agreed last weekend. Financial terms aren't available, but Cyprus insists it got the best deal under the (pretty terrible) circumstances:

After talks between Cyprus President Nicos Anastasiades with Greek Prime Minister Antonis Samaras, it was confirmed that the spinoff issue of Greek branches of Cypriot banks has been settled with the most favourable terms under the present circumstances, with a significant benefit for the Cypriot side.

[CBBB]

Greece takes control of Cyprus banks' Greek assets

Greek banks are taking control of the branches and assets of Cypriot banks based in Greece, following a deal hammered out between the two countries, and announced in the last few minutes.

This was one element of the original bailout deal agreed last weekend. Financial terms aren't available, but Cyprus insists it got the best deal under the (pretty terrible) circumstances:

After talks between Cyprus President Nicos Anastasiades with Greek Prime Minister Antonis Samaras, it was confirmed that the spinoff issue of Greek branches of Cypriot banks has been settled with the most favourable terms under the present circumstances, with a significant benefit for the Cypriot side.

Greek branches of Laiki will go to Alpha Bank, those of BoC and Hellenic will go to Piraeus bank.

[sven]

Thanks for that CyprusGrump and CBBB

[cyprusgrump]

Insiders: deposit tax could be added to legislation today

Cyprus insiders have confirmed to the Guardian that the original plan to tax bank deposits is back on the agenda today.

But it's likely that small savers with less than €100,000 in the bank would be spared (but that's not official)

The move comes growing criticism of the way Cypriot politicians have handled the crisis.

From Nicosia, Helena Smith reports:

Insiders are telling me that the tax levy may well be included in legislation MPs will be called to vote on later today.

The chief executive of Laiki Bank has also joined the chorus of criticism of the the government's alternative bailout calling the restructuring of Cyprus' second biggest bank "a disaster."

"It will be a disaster not just for the bank but for the economy of Cyprus," he said.

Dividing the lender between "good" and "bad" banks would have a knock-on effect for other banks he argued and lead, inexorably, to soaring unemployment, closure of businesses and loss of deposits.

"The bank is a systemic bank and we believe this problem will be transferred to the other banks very quickly. So effectively no bank will be able to operate normally from now on and I don't really know until when."

That is in line with view of other more cool-headed analysts who have also described the overwhelming repudication of the first bailout package as a classic example of MPs pandering to populist sentiment.

Cypriot TV is reporting that those with more than €100,000 in a Cypriot bank could lose 15% of their savings.

[Jerry]

But it's likely that small savers with less than €100,000 in the bank would be spared (but that's not official)

Cypriot TV is reporting that those with more than €100,000 in a Cypriot bank could lose 15% of their savings.

Which is what they should have done in the first place. The Cyprus banking industry is buggered whatever happens.

Dragging out this fiasco in public for a whole week has probably buggerd the only remaining major industry - tourism.

[cyprusgrump]

But it's likely that small savers with less than €100,000 in the bank would be spared (but that's not official)

Cypriot TV is reporting that those with more than €100,000 in a Cypriot bank could lose 15% of their savings.

Which is what they should have done in the first place. The Cyprus banking industry is buggered whatever happens.

Dragging out this fiasco in public for a whole week has probably buggerd the only remaining major industry - tourism.

Indeed... It is the worst possible scenario....

[sven]

Ok the Laiki Bank is closing, but are the deposits protected By Deposit Protection Scheme, they should be, if the other Banks are being kept open, then surely depositors under the scheme will be paid, or have they f'ed us.

[Demonax]

Cypriot TV is reporting that those with more than €100,000 in a Cypriot bank could lose 15% of their savings.
Which is what they should have done in the first place. The Cyprus banking industry is buggered whatever happens.

In the short term, we have to accept a major shrinking of the banks, safeguard deposits less than 100k and make sure we don't pile up any further loans. I've said that we should accept a 16 per cent levy on uninsured deposits. This is a reasonable scenario to go forward. It's not going to be easy but the alternative of default and euro exit will be much worse.

How the Eurogroup and troika managed to turn this issue into a full-blown crisis that has seriously undermined faith in the euro and European banking, is an incredible feat of idiocy. Says a lot about the incompetents who run the show in Brussels, Frankfurt and Berlin.

[GreekIslandGirl]

Ok the Laiki Bank is closing, but are the deposits protected By Deposit Protection Scheme, they should be, if the other Banks are being kept open, then surely depositors under the scheme will be paid, or have they f'ed us.

It's not closing. The most they have suggested is restructuring. (Maybe some superfluous branches closing to improve efficiency?).
DPS still applies.