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Cyprus Depositors Will Lose 62.5% Of Savings

From Reuters:

Big depositors in Cyprus to lose far more than feared

By Michele Kambas | March 29, 2013

NICOSIA (Reuters) – Big depositors in Cyprus’s largest bank stand to lose far more than initially feared under a European Union rescue package to save the island from bankruptcy, a source with direct knowledge of the terms said on Friday.

Under conditions expected to be announced on Saturday, depositors in Bank of Cyprus will get shares in the bank worth 37.5 percent of their deposits over 100,000 euros, the source told Reuters, while the rest of their deposits may never be paid back

Notice how Reuters puts this. They artfully avoid spelling out that this means the depositors are having 62.5% of their money stolen.

Officials had previously spoken of a loss to big depositors of 30 to 40 percent…

In fact, the original talk was 9% on everyone’s savings. And then it was 12% just on the rich. And now it is 62.5%. Isn’t it funny how quickly these things ratchet up?

But, as usual, the first low numbers were put out to get the people used to the idea.

Cypriot President Nicos Anastasiades on Friday defended the 10-billion euro ($13 billion) bailout deal agreed with the EU five days ago, saying it had contained the risk of national bankruptcy…

"In no way will we experiment with the future of our country," he said…

Stealing 62.5% of the wealth of people foolish enough to put money in your country’s banks won’t hurt the future of Cyprus?

Cypriots, however, are angry at the price attached to the rescue – the winding down of the island’s second-largest bank, Cyprus Popular Bank, also known as Laiki, and an unprecedented raid on deposits over 100,000 euros…

Where are the riots? Oh, that’s right. The kind of people who riot are all for stealing from the rich. This is a victory for them.

Warnings of a stampede at Cypriot banks when they reopened on Thursday proved unfounded.

Could that be because the government has prevented people from withdrawing more than $384 dollars? Just like it has outlawed anyone leaving the country with more than $1,282 dollars.

But as Reuters reported last Monday, a lot of the Russian money has already left Cyprus. Nobody knows how much. But that could help to explain why the amount they had to steal from the remaining depositors has skyrocketed.

So now this will mostly hit the local residents and small businesses. As usual.

This article was posted by Steve on Monday, April 1st, 2013. Comments are currently closed.

3 Responses to “Cyprus Depositors Will Lose 62.5% Of Savings”

  1. GetBackJack says:

    This is not about the Euro

    This was an operation by Russian Oligarchs playing for keeps, gun running, money laundering, a power play amongst those who seek to hurt those defying Putin, etc.

    It’s got nothing to do with what we can see on the surface.

  2. BannedbytheTaliban says:

    Coming soon to a 401k near you.

  3. River0 says:

    It’s far worse than they’re saying. The depositors GET SHARES IN THE BANK. The bank is essentially insolvent. Those shares will plummet in value when they start trading and people sell them. They could lose 90% of their value immediately if enough people sell. Who will be buying shares in a Cyprus bank?

    The Cyprus banks lost most of their capital when they bought Greek bonds in recent years. Chances are all the Cyprus banks are worthless shells propped up by the EU.

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