Cyprus reaches last-minute deal on 10 billion euro bailout
http://news.yahoo.com/cyprus-eu-imf-agre...29819.html
Highlights:
Backed by euro zone finance ministers, the plan will spare the Mediterranean island a financial catastrophe 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 recapitalise Bank of Cyprus, the island's biggest, 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.
It was unclear if banks would reopen for business on Tuesday, but an announcement, if any, was anticipated to be accompanied by restrictions on capital movements to prevent a run on banks.
UNFORESEEABLE CONSEQUENCES
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 in Bank of Cyprus, he told state radio: "The assessment is that it will be under or around 30 percent."
The Cyprus central bank said the agreement had also avoided the disorderly default of Laiki Bank.
Russia signalled it would back the bailout even though it would impose big losses on Russian depositors, who have billions in Cyprus banks.
President Vladimir Putin ordered officials to restructure a loan Moscow granted to Cyprus in 2011 - having rejected Nicosia's request for easier terms in crisis talks last week.
Prime Minister Dmitry Medvedev - who ranks below Putin - earlier criticised the bailout, voiced the anger expressed by Russian depositors, saying: "The stealing of what has already been stolen continues."
Diplomats said the president had fought hard to preserve the country's business model as an offshore financial centre drawing huge sums from wealthy Russians and Britons but had lost.
...So - looks like the Kremlin OK with clipping the Cypriot money launderers for a 30% seizure re ah um oh yeah conversion of deposits to "equity" and in the meantime to be FROZEN?
Worse nightmare than the large depositors even imagined. Imagine "Frozen" accounts and at least 30% if not 100% conversion of cash to "equity" in a questionable "good" bank set up by ECB and IMF banksters??? Not too reassuring if you look closely. Vladimir Putin, Chairman of Russia Inc must be laughing his ass off - he has been quoted (Ria Novosti & Russia Today) that he wants to take initiatives that will repatriate wealth "looted" from Russia since the Yeltsin years and bring it back to Russia to "invest" read TAX - to build Russias Infrastructure - they could use a Nation Wide High Speed Rail and Autobahn system - Russian 2 Lane major intercity highways are lethal - not to mention their 4 lanes as well. I only feel safe in Moscow because traffic moves at about 4 miles an hour. So shivers are running down the backs of anyone with more than $100K Euros now in any bank really.
In the USA I would only hold large deposits now in institutions with strong private insurance on the entire amount of the Deposits instead of meaningless coverage by FDIC that simply consolidates small "failed" banks into larger solvent banks creating a monolithic banking system rather than previously diverse state by state system - too big to fail just get bigger - same for the EU - think giant Mutual Funds like Fidelity and Vanguard - I know Fidelity carries 100% private insurance on all securities accounts - of course thinking is no insurance necessary on Money market accounts - but really have to wonder now - where does your money market money really sit?
