Cyprus Reaches Deal on 10 Billion Euro Bailout – Will Confiscate Citizens’ Cash

cyprus raid
Drudge reported:
Deal calls for 40% seizure on accounts above 100,000 Euros…
Russian nationals stand to lose billions…
Furious: ‘Tantamount to theft’…
Regulation, error wipe out all profits for UK banks…
Spain Brings the Pain to Bank Investors…

Cyprus reached a deal with the European Union to shut down its second largest bank and raid savings accounts of uninsured depositors.
Reuters reported:

Cyprus clinched a last-ditch deal with international lenders to shut down its second-largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians, in return for a 10 billion euro ($13 billion) bailout.

The agreement came hours before a deadline to avert a collapse of the banking system in fraught negotiations between President Nicos Anastasiades and heads of the European Union, the European Central Bank and the International Monetary Fund.

Without a deal, Cyprus’s banking system would have collapsed and the country could have become the first to crash out of the European single currency.

Swiftly backed by euro zone finance ministers, the plan will spare the Mediterranean island a financial meltdown by winding down the largely state-owned Popular Bank of Cyprus, also known as Laiki, and shifting deposits below 100,000 euros to the Bank of Cyprus to create a “good bank”.

Deposits above 100,000 euros in both banks, which are not guaranteed under EU law, will be frozen and used to resolve Laiki’s debts and recapitalize Bank of Cyprus through a deposit/equity conversion.

The raid on uninsured Laiki depositors is expected to raise 4.2 billion euros, Eurogroup chairman Jeroen Dijssebloem said.

Laiki will effectively be shuttered, with thousands of job losses. Officials said senior bondholders in Laiki would be wiped out and those in Bank of Cyprus would have to make a contribution.

But, don’t worry. This could never happen in America.

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