Cyprus-Forum.com

[supporttheunderdog]

Money comes , goes and come back its not the end of the world as some think.

Bravo.

There are many of our politicians , they come on TV and scare the public we have been destroyed, its the end of Cyprus and they create more damage with a blame game and catastrophic scenarios , they forget that other countries suffered much more ie Japan hiroshima and atomic bomb.Japan is one country I respect for this.

After such wars wealthy countries willingly give to help repair broken economies, Germany after WW2 itself is an example of this. Unfortunately the Troika and in particular Germany are not prepared to show the same benevolent attitude towards Cyprus for political reasons because, as Lyndon Johnson put it, "Cyprus is a flea"

I'm sure Cyprus will survive but many bank workers will have to put away their suits and take the menial jobs that they expected poor Asians and Europeans to do. It could be lesson for the UK where hundreds of thousands of east Europeans enter the country and do jobs that our unemployed can't be bothered with because they get too much dole money.

how true

[Svetlana]

I am sure it is not true but my Financial Advisor (my gardener) has just told me Laiki Bank has 'gone under'...just another rumour I am sure

Bit of advice,get another gardener or financial adviser

I must seek his advice on my Love Life, it seems...

[observer]

Looks like financial advisers may be looking for jobs, so if you find a handsome one who knows about plants ......

[supporttheunderdog]

If it's a 90 days account, you give 90 days notice if you want to close your account, otherwise you lose 90 days interest. Same as always.

Stop scaremongering with bloggers' gambles.

But can I still draw out money to meet monthly demands and will there be a restriction on the amount i can withdraw each month?

They're just restructuring the banks - that doesn't mean all previous practices are changed. After a few months of blips, it will settle down. Happened when Laiki became Marfin in Greece.

It will be the huge investors they are trying to curb.

- Anyway, we need to wait to get details, and don't let people alarm you.

Now we know the details: Laiki will vanish. This is more than the conversion of Laiki to Marfin in Greece. That probably means most, if not all, of their branches, and the head office,:will close, probably sooner rather than later . The few branches which might remain will be those offering some advantages to BoC due to e.g. location, space, etc and which in one way or another will probably be absorbed in to BoC.

[cyprusgrump]

If it's a 90 days account, you give 90 days notice if you want to close your account, otherwise you lose 90 days interest. Same as always.

Stop scaremongering with bloggers' gambles.

But can I still draw out money to meet monthly demands and will there be a restriction on the amount i can withdraw each month?

They're just restructuring the banks - that doesn't mean all previous practices are changed. After a few months of blips, it will settle down. Happened when Laiki became Marfin in Greece.

It will be the huge investors they are trying to curb.

- Anyway, we need to wait to get details, and don't let people alarm you.

Now we know the details: Laiki will vanish. This is more than the conversion of Laiki to Marfin in Greece. That probably means most, if not all, of their branches, and the head office,:will close, probably sooner rather than later . The few branches which might remain will be those offering some advantages to BoC due to e.g. location, space, etc and which in one way or another will probably be absorbed in to BoC.

The branch in Pissouri closed a month or two ago... people are driving all the way to Pafos each day to get their cash out...

€100,000 not really a "huge investor" is it...?

[B25]

If it's a 90 days account, you give 90 days notice if you want to close your account, otherwise you lose 90 days interest. Same as always.

Stop scaremongering with bloggers' gambles.

But can I still draw out money to meet monthly demands and will there be a restriction on the amount i can withdraw each month?

They're just restructuring the banks - that doesn't mean all previous practices are changed. After a few months of blips, it will settle down. Happened when Laiki became Marfin in Greece.

It will be the huge investors they are trying to curb.

- Anyway, we need to wait to get details, and don't let people alarm you.

Now we know the details: Laiki will vanish. This is more than the conversion of Laiki to Marfin in Greece. That probably means most, if not all, of their branches, and the head office,:will close, probably sooner rather than later . The few branches which might remain will be those offering some advantages to BoC due to e.g. location, space, etc and which in one way or another will probably be absorbed in to BoC.

Will they be selling their iconic building in Nicosia, ill buy it!

[sven]

It is no longer a tax, for a reason, nobody gets to vote on it.
http://www.zerohedge.com/news/2013-03-2 ... reach-deal

UPDATE: It appears the 'deal' to default/restructure the banks has been designed to bypass the need for parliamentary votes, since it is theoretically not a tax.

While we have little color on what kind of carnage the President of Cyprus had to accept to his fellow countrymen, the news is that :

CYPRUS, TROIKA REACH AGREEMENT IN PRINCIPLE, EU OFFICIAL SAYS
DEAL MADE AT DINNER WITH DRAGHI, LAGARDE, VAN ROMPUY, BARROSO

The terms, unsurprisingly what zee Germans wanted, are:

i) Laiki to be wound down;

ii) Bank of Cyprus to survive but with deposit haircuts of up to 40% for the uninsureds, and

iii) deal would see secured deposits in Laiki moved to Bank of Cyprus.

In other words, a deal far worse then the original on proposed by the Eurogroup last week - when the banks still existed. The key appears to be the 'saving' of the insured depositors (crucial to avoid a pan-European bank run) and the crushing of the 'whale' depositors.

A more granular breakdown of the deal's "accomplishments", but with the same result for large depositors, via Reuters:

Laiki will be resolved immediately - with full contribution of equity shareholders, bond holders and uninsured depositors - based on a decision by the Central Bank of Cyprus, using the newly adopted Bank Resolution Framework.
Laiki will be split into a good bank and a bad bank. The bad bank will be run down over time.
The good bank will be folded into Bank of Cyprus (BoC), using the Bank Resolution Framework, after having heard the Boards of Directors of BoC and Laiki. It will take 9 billion Euros of ELA with it. Only uninsured deposits in BoC will remain frozen until recapitalization has been effected, and may subsequently be subject to appropriate conditions.
The Governing Council of the ECB will provide liquidity to the BoC in line with applicable rules.
BoC will be recapitalized through a deposit/equity conversion of uninsured deposits with full contribution of equity shareholders and bond holders.
The conversion will be such that a capital ratio of 9 % is secured by the end of the program.
All insured depositors in all banks will be fully protected in accordance with the relevant EU legislation.
The program money (up to 10 billion Euros) will not be used to recapitalize Laiki and Bank of Cyprus.

As Bloomberg further clarifies, uninsured depositors, or those with over EUR100,000 in savings may be completely wiped out: "Deposits below the EU deposit-guarantee ceiling of 100,000 euros will be protected, and a loss of no more than 40 percent will be imposed on uninsured depositors at the Bank of Cyprus, two EU officials said. Uninsured depositors at Cyprus Popular would largely be wiped out, two other officials said."

Farewell Russian oligrach money. We hardly knew ye.

S&P 500 futures and EUR are surging, Gold is dropping modestly.

We await final confirmation of the final terms of the final deal once the Cypriot people wake up (and don't forget the ECB 'standard of living' rules).

[cyprusgrump]

The best early reaction

Joseph Cotterill of FT Alphaville has written the best detailed analysis of the Cyprus deal: Scratch one stupid idea [Updated]:

Here are the key points (head over to AV for the full read (then come back!))

1) In case you didn’t get the memo the first time, this still isn’t about spanking money-launderers. (because there's no differentiation between foreign and domestic customers with over €100k)

2) It’s a depositor bail-in — for two specific banks, one of which is in full resolution. (rather than forcing all customers at all banks to contribute, as in the first - hated - bailout plan)

3) It’s also a senior bank bond bail-in. (Holders of Laiki’s senior unsecured debt look fully wiped out - those at Bank of Cyprus will take a brisk haircut)

4) Emergency Liquidity Assistance. -- Was this the week we found out that ELA will be protected from default no matter what? (under the deal, the assistance supplied by the European Central Bank to Laiki is now transferred to Bank of Cyprus)

* * * * * *

And over at Reuters, Felix Salmon points out that the winding-down of Laiki is a rather big deal for a rather small country:

The resolution of Laiki is going to give the world a very real example of what happens when a too-big-to-fail bank is allowed to fail.

Laiki is small by global standards, but very large by comparison with Cyprus’s GDP. If Cyprus can survive Laiki’s collapse, then maybe — just maybe — the world could cope with the “resolution” of a big bank like Citigroup. But that’s a very big “if”.

More likely, the costs to Cyprus of allowing Laiki to fail will be enormous, both politically and economically. And 800,000 Cypriots will for years to come be paying the price of what Mohamed El-Erian elegantly calls “bailout fatigue”.

[GreekIslandGirl]

If it's a 90 days account, you give 90 days notice if you want to close your account, otherwise you lose 90 days interest. Same as always.

Stop scaremongering with bloggers' gambles.

But can I still draw out money to meet monthly demands and will there be a restriction on the amount i can withdraw each month?

They're just restructuring the banks - that doesn't mean all previous practices are changed. After a few months of blips, it will settle down. Happened when Laiki became Marfin in Greece.

It will be the huge investors they are trying to curb.

- Anyway, we need to wait to get details, and don't let people alarm you.

Now we know the details: Laiki will vanish. This is more than the conversion of Laiki to Marfin in Greece. That probably means most, if not all, of their branches, and the head office,:will close, probably sooner rather than later . The few branches which might remain will be those offering some advantages to BoC due to e.g. location, space, etc and which in one way or another will probably be absorbed in to BoC.

Yes, any name change will make it look like it's "vanished". But, as far as I noticed, about 50% of the branches closed during that restructuring. With internet banking making huge branches unnecessary, this is going to happen more.

[sven]

The best early reaction

Joseph Cotterill of FT Alphaville has written the best detailed analysis of the Cyprus deal: Scratch one stupid idea [Updated]:

Here are the key points (head over to AV for the full read (then come back!))

1) In case you didn’t get the memo the first time, this still isn’t about spanking money-launderers. (because there's no differentiation between foreign and domestic customers with over €100k)

2) It’s a depositor bail-in — for two specific banks, one of which is in full resolution. (rather than forcing all customers at all banks to contribute, as in the first - hated - bailout plan)

3) It’s also a senior bank bond bail-in. (Holders of Laiki’s senior unsecured debt look fully wiped out - those at Bank of Cyprus will take a brisk haircut)

4) Emergency Liquidity Assistance. -- Was this the week we found out that ELA will be protected from default no matter what? (under the deal, the assistance supplied by the European Central Bank to Laiki is now transferred to Bank of Cyprus)

* * * * * *

And over at Reuters, Felix Salmon points out that the winding-down of Laiki is a rather big deal for a rather small country:

The resolution of Laiki is going to give the world a very real example of what happens when a too-big-to-fail bank is allowed to fail.

Laiki is small by global standards, but very large by comparison with Cyprus’s GDP. If Cyprus can survive Laiki’s collapse, then maybe — just maybe — the world could cope with the “resolution” of a big bank like Citigroup. But that’s a very big “if”.

More likely, the costs to Cyprus of allowing Laiki to fail will be enormous, both politically and economically. And 800,000 Cypriots will for years to come be paying the price of what Mohamed El-Erian elegantly calls “bailout fatigue”.

What they are doing is wiping out the 'middle' classes with this, creating a lower level and widening the gap between the super rich and the 'well off / rich' sector, and when they bring in hyper-inflation that 100,000 euros is going to be even smaller. Cyprus is obviously going to be the 'Model' for the European banking sector. Cyprus should have walked away from the Euro.