Cyprus and the Latest Debt Crisis

Tuesday, March 19, 2013

The Central Bank of Cyprus (Michal Osmenda/Wikimedia Commons)

Cyprus is the latest EU country to face bankruptcy - and potentially bring down the rest of the region with it. Joseph Cotterill, reporter for Financial Times Alphaville blog, discusses the EU's efforts to tax bank deposits - including those of regular Cyprians - and the fierce resistance to the plan.


Joseph Cotterill

Comments [11]

jen lynch from manhatttan

I think they should just get the $13 billion if they would agree to stop eating the world's songbirds.

Mar. 19 2013 09:40 PM

I'm very late to this party this afternoon, but I just read the description of this segment from, presumably, Brian Lehrer's staff. A person from Cyprus is a Cypriot. A "Cyprian" is, in 18th-century English slang, a highclass prostitute.

Mar. 19 2013 03:00 PM
Taher from Croton on Hudson

A lot people here are talking about a “tax” on depositor’s accounts. No this is out and out seizure of 6.75% of deposits over 20 to 100 thousand Euros and 9.99% over 100 thousand.

Mar. 19 2013 11:32 AM
Sheldon from Brooklyn

This is no different from social security or a municipal pension. It's guaranteed, unless the entity goes out of business.

Nothing in life is guaranteed, asked the Madoff victims. The FDIC only covers up to a certain amount anyway and if they, i.e. the feds - becomes insolvent, then you are out of luck anyway.

Mar. 19 2013 11:19 AM
Taher from Croton on Hudson

The issues not talked about is, that the seizures of deposits set a precedent.
That can lead to a run on banks by depositors in Italy, Spain and Portugal where the public may become frighten by having their deposits ceased in case their country needs a bail out.
A bank run can create a huge banking collapse in the Euro zone.

Mar. 19 2013 11:19 AM
JR from nyc

the Brazilian government has been taxing people that way for decades

Mar. 19 2013 11:18 AM
jgarbuz from Queens

There is nothing that can legally stop the government from taxing your bank account and just taking the money straight away. I do think that the president and government that does that will never be elected again, but otherwise there is no legal reason why the government can't tax your assets wherever they may be located.

Mar. 19 2013 11:18 AM

@Shelldon from Brooklyn

Across the board seizures wipes away any semblance of justice free market forces. This is the ultimate in socializing risk to protect the corrupt. Of course, we do that here in the US through deliberate monetary inflation, but at least we have an option to reallocate our resources in response to monetary policy. And where would you draw the line? 20%? 30%? What if you woke up to a 75% change on your life savings? Would you be happy to have 25%?

Mar. 19 2013 11:14 AM
Sheldon from Brooklyn

Doesn't European banks have a version of an FDIC? If they were fully "insured" beforehand, then that is a different issue.

Mar. 19 2013 11:09 AM
Brock from Wall Street

Is Cyprus the rallying cry for mass restructuring? Could it become a grass roots populist movement? This is already hitting social media and the call, however mildly put, is for overthrow.


Mar. 19 2013 11:07 AM
Shelldon from Brooklyn

Why should German taxpayers bailout these banks?

90% of something, is better than 100% of nothing. If Russian money launderers and citizens of Cyprus don't understand that, let them lose everything.

Mar. 19 2013 11:00 AM

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