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Cyprus Deal Reached: 40% seizure on accounts over 100,000 Euros

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SYDNEY (MarketWatch) — Cyprus reached a deal early Monday that would enable it to receive funds from its European and international lenders to prop up its ailing banking sector and prevent its exit from the euro zone, reports said.

The cash-strapped island nation agreed a deal with the European Central Bank (ECB), the European Commission and the International Monetary Fund — collectively known as the Troika — to secure 10 billion euros ($13 billion) of aid, the reports said, citing European Union officials.

Reuters reported that the proposed agreement would include the closure of the country’s second-largest lender, Popular Bank of Cyprus or “Laiki Bank,” with deposits under €100,000 to be shifted to the larger Bank of Cyprus. Deposits over €100,000 at Laiki would be frozen and used to pay off debts, it said.

Separately, Agence France-Presse reported that, as part of the agreement, the country will impose a 40% haircut on Bank of Cyprus depositors holding more than 100,000 euros in their accounts.

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The only differences

between this and the American bailouts are semantic. One takes a percentage of everyone's "money" and gives it to the banks. The other takes a percentage of the value of everyone's "money" and gives it to the banks. ...or am I missing something?

No, this is different. It's

No, this is different. It's taking 40% of a select few people's money, people who (wrongly) thought their money was safe because they had it on deposit in a bank.

Taking it from everybody via inflation, the US way, is safer for the elites since so few people understand what they're doing.

This taking is very different. Everyone can see it. It's outright taking. In a way, it's more fair, as only those entrusting the thieving banks are being hurt, but it's the fact that this shatters the myth that your money is safe in a bank that is so surprising.

Either the Europeans elites are really smart and determined to get the pain out of the way sooner rather than later, or they're completely clueless to the potential ramifications of their actions here.

I must be willing to give up what I am in order to become what I will be. Albert Einstein

I'm going to be THAT GUY:

This wouldn't even be possible if they all used Bitcoin.

What is a bank?

It's supposed to be a place to keep the money you deposit safe from theft while earning interest.

What WAS a bank?

They are something different now.

(yes, I am only agreeing with you...)

Obama fair share

This is the logical result of the Obama fair share argument. Our Progressive friends are dancing in the streets. Coming to America soon.

the stranger's picture

contracts bypass the dollar

"No longer content with creating "money" out of thin air, the powers that be have decided to confiscate it from those without that privilege. Who will keep their money in a European bank now? We shall see." ©2013 - The Privateer, http://www.the-privateer.com, capt@the-privateer.com, (reproduced with permission)

So, it could drive money west - that's too predictable. The information streaming in seems right, but in a way similar to Stratfor; actionable intel with a questionable or mainstream spin. The results are exactly what one would expect them to be.

This has more moving parts than I can track. Much of this could be Hegelian planning - since the ramifications are massive. Sovereign cross boarder contracts that bypass the dollar continue to gain in number and gain momentum. Several important agreements are to have been completed in the last two weeks. This could be part of the tectonic regional shifts. Look for Cyprus to seek Russian protection as a Russian Republic, new Russian base, etc. Research credit J.Willie.

The Euro prepares to split north and south. Behind the fiery facade is a conflagration.

Garan's picture

Banks Message: the more you deposit, the more you lose.

Punishing their best customers?

Garan's picture

There's only one thing worse than the 40% hair cut...

..having it taken out before it even reaches the bank, year after year throughout your entire life.

The worst part is the way the

The worst part is the way the remaining 60% of your hair looks on your head.

LOL for the first time

LOL for the first time awhile! Thx

I must be willing to give up what I am in order to become what I will be. Albert Einstein

This is just a covert attack on Russia

It's an underhanded covert attack on Russian deposits. Look for blowback at some point and the government to use it to its advantage.

TheSin

Berezovsky Did Not Kill

Berezovsky Did Not Kill Himself, Litvinenko's Wife Says
"The widow of a Russian dissident who was poisoned in London has said she does not believe that the oligarch Boris Berezovsky killed himself."
http://www.telegraph.co.uk/news/worldnews/europe/russia/9951...

If you have over 100,000 euro in a bank in Cyprus

You have nothing to fear but fear itself.

Oh boy...

a 40% haircut

This is going to get ugly.

Billionaires don't play nice

Billionaires don't play nice with each other when stabbed in the back by their own kind.

Billionaires will be fine.

Before the actual theft bribes will be paid and money will be transferred west. Only the middle class will take the hit. The politically connected will be fine.

People with adequate savings

People with adequate savings don't riot. It's those "below the line" who riot.

Cyril's picture

I don't know how billionaires play with each other, there...

I don't know how billionaires play with each other, there...

The one thing the hell I know FOR SURE, though:

as I've never been anywhere close to having 100,000 units of fiat money on any bank account, at any point in time, ever, but even at only 10,000 units or so... I'd be ALREADY, REALLY, REALLY p*ssed off with such a "haircut".

...

"Your Mileage May Vary."

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

My monies in 100% owned real

My monies in 100% owned real estate, except for the property taxes of course. Very little cash, what's that going to be worth? But I know for a fact, billionaires can buy the best snipers on the planet money can buy.

Bank Of Cyprus Bomb Explosion

Bank Of Cyprus Bomb Explosion Reported In Limassol

It's getting real

.

Another Country Destroyed by The Money-Eyed Changers

Isn't it better to cut what little cancer is in the body now, then to allow it to completely spread throughout the whole body....

The people of Cyprus will suffer much suffering as time goes on..

"My people parish for lack of insight(knowledge)"

That would be "perish"

a parish is a church.

double take

"Separately, Agence France-Presse reported that, as part of the agreement, the country will impose a 40% haircut on Bank of Cyprus depositors holding more than 100,000 euros in their accounts."

Michael Nystrom's picture

"Either Way, Cyprus Destined for Ruin"

It won't be like Iceland... What a study in contrasts this will be.

http://www.telegraph.co.uk/news/worldnews/europe/cyprus/9950...

Islanders also fear that as the bank levies bite, businesses and big investors will have to start laying off staff, heralding high levels of unemployment.

Around 70 per cent of Cypriots are employed in the financial services and banking sector, a number that dwarfs the 20 per cent working in tourism.

“People are worried not just because they could lose their savings but because they could lose their jobs too,” said Ioanna Constantinou, 24, who works in the financial services industry in Nicosia, the Cypriot capital.

“I think a lot of people will be out of work soon and looking for jobs. The young people, especially, will go abroad because you can’t live with this level of uncertainty,” said Miss Constantinou, who like many Cypriots attended a British university. “The banking sector is finished, we have lost all credibility – who is going to want to bring their money to Cyprus now?”

As Cypriots anxiously wait to see exactly what the deal struck in Brussels will entail, shops in Nicosia were all but deserted, with many offering discounts of up to 50 per cent.

Restaurants in the city's picturesque old town are normally jammed at the weekend, but on Saturday night many were all but empty.

http://www.telegraph.co.uk/news/worldnews/europe/cyprus/9950...

There was a 40 something bank

There was a 40 something bank clerk interviewed on CNBS this AM. She was not only expecting to lose her job, but her pension account as well.

I must be willing to give up what I am in order to become what I will be. Albert Einstein

It was funny Fox news

It was funny Fox news reported it as a good thing minutes after it was announced. Stock in Polonium-210 shot through the roof immediately following. Not to be approved by Cypriot Parliament that got zero yes votes on the last package. They not only stole the peoples money, they also stole the countries vote on the matter.

Get ready for this.

E Pluribus Unum!

E Pluribus Unum!