Deposits haircut in the Bank of Cyprus can be much higher than expected. While the real haircut may be at least 37.5% for deposits over 100,000 euro, another 22.5% may be ‘frozen’ and land on a special fund for an unspecified time.
“Wealthy depositors in the Bank of Cyprus could face losses of as much as 60 per cent — far in excess of what had been expected — as the country scrambles to save what is left of its stricken banking sector.
Depositors with more than €100,000 in Bank of Cyprus are set to get shares in the bank in exchange for at least 37.5 per cent of their uninsured deposits, while a further 22.5 per cent of their deposits will be put into a special fund attracting no interest and could see a further write offs.
The haircut on depositors was a condition for Cyprus receiving €10bn in bailout funds from the European Union and the International Monetary Fund, but it was though that around a 40 per cent haircut would be the end of it.
Officials say that the haircut could be moved up from 37.5 per cent to 45 per cent.
Large depositors in Laiki Bank, which is being broken into good and bad banks, are likely to see nearly all of their assets written off.” (CNN)
At the same time voices become loud that certain depositors groups are exempted from the disastrous seizure.
“A Greece-based organisation known as the Association of Industries of Northern Greece has written to Greek finance minister Yiannis Stournaras urging him to contact Eurogroup members and demand that Greek businesses with accounts in Cyprus banks should be exempted from the haircut on deposits, reported Cyprus News Agency yesterday.The Association said that the bail-in was “absolutely unfair for Greek businesses” and asked Stournaras to secure “exemptions” along the lines that these were secured for the accounts of the Cyprus state sector, municipalities and universities. (cyprusmail)
An attempt that will certainly meet with strong objections from the Cypriot side.
Another question is: how about the deposits of below 100,000 euro. Can their owners withdraw them? Under the current capital control restrictions, they cannot….
PS If deposits get a 60% haircut in BOC I wonder how deposits haircut would look like in CPB – 150%?
anybody studying to be a financial advisor should now shred all their notes and start all over
financial advisors already shred their diplomas last week. now they should be due to close down their companies.
It’s becoming very clear that the Great Financial Rip-off is a huge scam for which we all are, and will continue to pay dearly. Anybody who willingly takes part in maintaining or prolonging the financial war on humanity is guilty of war crimes and should be locked away for ever, without exceptions.
Who would have thought such a thing possible?
(via zerohedge.com, link available of KTG allows)