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[tidla]

As each day passes, it gets even scarier.

Thinking of growing a long neck.

[Nickbat]

We (in the Euro) are all saved.

20% levy on Bank of Cyprus accounts. Everyone else 4% (?).

I wonder what the second bailout will involve?

Watch the capital flight on Monday.

UK possible downgrade too. GRRR.

I thought they were putting restrictions in place to avoid capital flight?

You're quite right, Steve, capital controls will be put in place...and my guess is that they shortly won't only be for Cyprus. 

If capital controls happen more and more with both Spain and Italy with their weak banking sectors being in the frame, this is the end of the Euro, as what is the point of a single currency if it can't flow around a single currency area easily? 

Countries will then decide to throw off the constraints of the Euro, so they can trade and export more easily to the rest of the world and be in control of their own currency destiny, instead of being subjugated to Germany. 

Indeed, Rods, I think we're nearing the end-game as far as the euro is concerned.

Nigel is doing his bit to help. 

http://www.telegraph.co.uk/news/politics/ukip/9950083/Ukip-urges-Brits-to-withdraw-their-money-from-Spanish-banks.html#disqus_thread

[dbdb]

A few people think banks take your money and keep it in a safe for you.
Most people think they take your £100 and lend some of it to someone and keep some back (the reserve, typically in the past 3%).
But what actually happens is you give them £100 and they lend out £97, the person who borrows it spends it and the lucky recipient deposits a new £97, the bank lend out £94 of that,  the new borrower spends it and the new recipent deposits £94, the bank lends out £91 and so on.  Eventually £100 has magically become £1,000.

Hence no bank in the world or any that has ever existed since fractional reserve banking was invented can withstand a run on the bank.  Even if the borrowers immediately returned all the money they borrowed. The way to trigger a run on a bank is for some brainless official to tell people either they may not get their money back at all or they will receive a haircut on it. 

No one with any sense will now want to leave money in a Greek, Spanish, Portuguese  or Italian bank. If the brainless idiot was German, which seems likely (though a Dutchman has put his hand up to it) maybe she was not being idiotic at all but rather clever (and criminal).

[Varche]

We (in the Euro) are all saved.

20% levy on Bank of Cyprus accounts. Everyone else 4% (?).

I wonder what the second bailout will involve?

Watch the capital flight on Monday.

UK possible downgrade too. GRRR.

I thought they were putting restrictions in place to avoid capital flight?

I meant in other countries. Slovenia and Estonia for a start. I dare say Italy, Spain and Portugal too.

Cyprus has capital control. The current daily ATM withdrawal limit sees to that until the banks re open. It will be very interesting to see what other measures are imposed in Cyprus.  I also understand New Zealand is planning a similar bank deposit haircut.http://www.scoop.co.nz/stories/PA1303/S00306/national-planning-cyprus-style-solution-for-new-zealand.htm

Anyone know the definition of a Bloated banking sector. ? Serious question. The BBC keep using the phrase in connection with Cyprus. I suspect they mean they have made lots of loans which may not be paid back.

[Sir Tigger KC]

I don't understand why they are now planning a 20% levy on Bank of Cyprus deposits over 100,000 Euros and a 4% levy on deposits over 100,000 Euros at other banks..... 

If they've changed their mind (again) and are now willing to impose a levy on savings, surly it's fairer to impose a flat levy at all banks? 

Maybe it's just me..... 

[tigers_gonads]

Dammed if they do, dammed if they don't 
This just about sums it up

http://www.ft.com/cms/s/0/de24fb32-94a1-11e2-9487-00144feabdc0.html#axzz2OTPR5x4o

[Vamps]

My parents are going to Cyprus in 7 weeks, so far they have been advised that credit and debit cards are not being taken, cash only, there are likely to be sorted, one way or another, in 7 weeks......

[Sir Tigger KC]

According to the BBC the levy on bank deposits over 100,000 Euros could be as high as 40%!!!!! 

[Lizzie_Zoom]

According to the BBC the levy on bank deposits over 100,000 Euros could be as high as 40%!!!!! 

............and this trend could continue in the Euro zone:

http://www.bbc.co.uk/news/business-21920574

Thank goodness our politicians never allowed us to enter that zone!

[albitz]

It is concievable that it could happen here though.If we have the expected Lib/Lab pact after the next election it wouldnt even be much of a shock.
And to think that Barrusso declared a month ago that the Euro crisis was over.
Its just beginning.

[Kevin Wood]

My parents are going to Cyprus in 7 weeks, so far they have been advised that credit and debit cards are not being taken, cash only, there are likely to be sorted, one way or another, in 7 weeks......

Depends if there are any banks still functioning there by then. I suspect they will be pretty rapidly emptied when they eventually decide to risk opening.

[Nickbat]

My parents are going to Cyprus in 7 weeks, so far they have been advised that credit and debit cards are not being taken, cash only, there are likely to be sorted, one way or another, in 7 weeks......

Depends if there are any banks still functioning there by then. I suspect they will be pretty rapidly emptied when they eventually decide to risk opening.

I think they may have been emptied already.

"As new President Nicos Anastasiades hesitated over an EU bailout that has wrecked Cyprus's offshore financial haven status, money was oozing out of his country's closed banks."

http://www.reuters.com/article/2013/03/25/eurozone-cyprus-muddle-idUSL5N0CG13920130325

[albitz]

The cat is out of the bag. "Cyprus is the template for future bailouts."
http://www.huffingtonpost.co.uk/2013/03/25/jeroen-dijsselbloem-sends_n_2949358.html?ncid=webmail20

[Kevin Wood]

Surely if you're going to give people a haircut you just do it and take the flack later? A week of uncertainty only ensures maximum damage is done.

Seems to me that this was all blown up to ensure the German aims of destroying these banks was carried out by the back door. I only hope it backfires on them and results in the Euro being shunned.

[doz]

It's made me think a bit different about savings. I'll won't be having much cash stashed away from now on. It will be asset rich cash poor. There's no way the government is gonna take any of my savings.