It looks like the Cypriot banks are going to be in a lot worse shape when they open than first thought. Cypriot capital controls don’t apply to branches in foreign countries and this is being used by people to withdraw deposits from the struggling banks. This will necessitate a much bigger haircut when the dust settles.
Then this morning the 20%-40% seizure of the depositor’s money, which was the range that had been discussed, was now admitted by the Finance Minister in Cyprus today to be more like an 80% expropriation and a timeline to get any money back of six to eight years. This is, I suspect, because while the banks were closed in Cyprus that they were still open in Greece and Britain so that certain monies crept out during the night, and probably big money, so that the banks in Cyprus are in far worse condition than previously thought or admitted.
Then, of course, because the EU Finance Ministers were not going to meet again and re-open this fiasco; more money had to be seized from the depositors. Now the Dutch Finance Minister chaired the meeting on Cyprus. He was the one that directed the entire affair on Cyprus and the template that he revealed was fist denied then admitted, then denied by the ECB and confusion reigned supreme. Now here comes the first pig; the representatives of the Eurozone finance ministries released a document this morning stating that Cyprus was not the template for future bail-outs. I suppose it was initially written in German and translated into English however they must have forgotten to translate it into Dutch. This is because when the Dutch Finance Minister was asked about this document, and he is the Chairman of the Finance Minister group remember; he said he knew nothing about the document.
the banks of Cyprus just re-opened in Greece this morning. I don’t know, the flights from Moscow to Athens must be jammed. There are no capital controls in Greece so you can take out what money you like while the banks in Cyprus are still closed and now subject to capital controls. “Sense” and her brethren “logical,” “rational” and “coherent” must have all departed from Europe in a huff. No one could make this up; no one.