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Response to Demeter (Reply #11)

Mon Mar 25, 2013, 07:14 AM

12. Banks drive gains for Europe after Cyprus deal

http://www.marketwatch.com/story/banks-drive-gains-for-europe-after-cyprus-deal-2013-03-25?siteid=YAHOOB

"HAPPY DAYS ARE HERE AGAIN..."

European stock markets advanced on Monday, with banks in the driverís seat, after Cyprus and its international lenders early in the morning struck a deal to save the country from bankruptcy...


Last-minute Cyprus deal to close bank, force losses

http://news.yahoo.com/cyprus-eu-imf-agree-draft-proposal-rescue-banks-002707963.html

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.

Swiftly endorsed 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. An EU spokesman said no across-the-board levy or tax would be imposed on deposits in Cypriot banks, although the hit on large account holders in the two biggest banks is likely to be far greater than initially planned. A first attempt at a deal last week collapsed when the Cypriot parliament rejected a proposed levy on all deposits.

Cyprus government spokesman Christos Stylianides said: "We averted a disorderly bankruptcy which would have led to an exit of Cyprus from the euro zone with unforeseeable consequences." Asked about the level of losses on uninsured depositors on Bank of Cyprus, he told state radio it was not possible to be specific at this stage. "The assessment is that it will be under or around 30 percent. But that is a bit of an arbitrary estimate."

THIRTY PERCENT! HOLEY MOLEY, BATMAN!


MORE AT LINK. THIS IS SHOCKING

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Tansy_Gold Mar 2013 OP
Demeter Mar 2013 #1
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LineLineLineReply Banks drive gains for Europe after Cyprus deal
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