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There is a full resolution (ie non bankruptcy) proposal in place, due for 2015. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2012:0280:FIN:EN:HTML
by justincormack 14y ago
There is a full resolution (ie non bankruptcy) proposal in place, due for 2015. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2012:0280:FIN:EN:HTML http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:20...
It should be less arbitrary that the current scheme, where senior bondholders and the ECB are not being touched.
If you look at the balance sheet of Cyprus Laiki half way down http://ftalphaville.ft.com/2013/03/16/1425732/a-stupid-idea-whose-time-had-come/ http://ftalphaville.ft.com/2013/03/16/1425732/a-stupid-idea-... then you see that debt is almost nothing. There is a lot of central bank (ECB indirectly) money which has not been haircut. The decision to haircut the "insured" depositors was a political one, allegedly made by Cyprus itself.
- bjornsing 14y agoI can well imagine that Cyprus made the controversial decision (to haircut the "insured" depositors) themselves, for political reasons. It's exactly the decision I'd make in Mr Anastasiades' place if I was being strong-armed by a German delegation. The simple reasoning (for me) would be to increase the risk of contagion above and beyond what Germany can accept, so as to maximize the likelihood of Berlin folding and offering better terms.
- justincormack 14y agoThis (registration required) appears to be what happened http://www.ft.com/cms/s/0/f890566a-8f24-11e2-a39b-00144feabdc0.html http://www.ft.com/cms/s/0/f890566a-8f24-11e2-a39b-00144feabd...