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Monday, March 18, 2013

The Cyprus bailout

Highway roberry, that is!
May we expect a bank-run in Cyprus? Hm... in Greece?.. in Italy?... in Spain?
I haven't found one single point in favour of the levy after about 4-5 hours of looking.
Probably David Beckworth's post at Macro and Other Market Musings is a good starting point. One can branch out following his links to everything interesting written on the topic. One small quote:
But that part is not new. What is new is the unexpected seizing of depositors funds. As Lars Seier ChristensenEd ConwayFelix Salmon, and Frances Coppola note, this sets a dangerous precedent for all Eurozone bank deposits.  Here is Coppola:
[T]he fact is that deposit insurance everywhere in the EU has now been undermined. The precedent has been set for insured depositors to suffer losses in order to protect Russian oligarchs and reckless banks. If the Eurogroup can impose this on Cyprus, it can do so elsewhere too.

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