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Why the Cyprus Bailout Is a Bigger Deal Than You Think

The Cyprus bailout plan could have far greater implications than you think.

Will the Cyprus act of taking money from the bank depositors be the start of a loss of confidence in banks in the Eurozone?

One thing we know for sure is that depositors in Cyprus will be making massive withdrawals from their banks.

If the same thing happens to banks in places like Spain, Italy and Greece, they could very well run into serious trouble soon. And that could be massive.

Why the Cyprus Bail In Is a Bigger Deal Than You Think

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henry says 9 years ago

Investors in Asia cheered news of a draft deal for Cyprus as local authorities and international lenders race to hammer out a bailout proposal before the European Central Bank’s deadline comes due at the end of Monday.

Sources told CNBC that the proposal included setting up a “good” and “bad” bank in Cyprus, which will mean that the Popular Bank of Cyprus, known as Laiki, would be shut down. The deal is still subject to approval by euro zone finance ministers.

The Nikkei rallied 1.2 percent while Australia’s benchmark S&P ASX 200 crossed the key 5,000 mark for the first time in three sessions. Seoul’s Kospi also jumped 1 percent to rebound from last week’s multi-month lows.

Meanwhile, the euro climbed 0.3 percent to push above the 1.30 handle against the greenback on the news.” CNBC Published: Sunday, 24 Mar 2013 | 8:30 PM ET
By: Nyshka Chandran

Big deal??.. no
Business as usual?? …yes

sender says 9 years ago

Soon, Cypriots will throw out the good for nothing Government messing around with the little man’s money.

henry says 9 years ago

Not likely to happen in other EU countries.
Ordinary people do not have money in the bank anyway, so what is there to withdraw?
Loans are being backed/sponsored by the ECB anyway.

The stock markets have jumped back to “normal”
The car market has even become more active
The property market has remained buoyant.
The bond market is alive and well
There are more REIT launches

Why is it that people always take such negative positions when some policy is being
applied by governments around the world?
Such as:
Japan’s monetary easing
UK’s interest rates remains unchanged
Australia’s interest rates unchanged

The idea has always been to pump the world with money ( just so that institutions are flushed… not the ordinary folks ) and that is the way it will remain even beyond 2014.
There is no turning back to “old school” economics. It is evolving and a new theory will emerge to replace Keynesian ideas.

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