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Saturday, March 16

16th Mar - Special: Bailout of Cyprus

Last update 14-Apr.  Links  from oldest to newest. The legendary "angry cab driver"-video is definitely not safe for work. 

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Cypriot bank deposits hit in €10bn bailout dealBrussels blog / FT
IMF Statement on Cyprus at the Eurogroup MeetingIMF

Euro Area Takes Aim at Depositors in Cyprus BailoutBB
Euro-area finance ministers agreed to tax bank deposits in Cyprus in an unprecedented measure to forge a 10 billion-euro ($13 billion) rescue plan. Cyprus will impose a levy of 6.75 percent on deposits of less than 100,000 euros -- the ceiling for European Union account insurance -- and 9.9 percent above that.

Savers forced to bear costs in Cyprus bailoutReuters
The euro zone struck a deal on Saturday to hand Cyprus a bailout worth 10 billion euros ($13 billion), but demanded depositors in its banks forfeit some money to stave off bankruptcy despite the risks of a wider bank run.

Cyprus Says Deposit Levy to Involve Bank-Share CompensationBB
Cypriot Finance Minister Michael Sarris said a planned levy on bank accounts in the country to help shore up its finances will involve compensation for depositors in the form of shares in the financial institutions.

Rehn Rules Out Future ‘Stability Fees’ on Euro Bank DepositorsBB
European Union Economic and Monetary Commissioner Olli Rehn said there won’t be a repeat of the tax on bank deposits that was imposed as part of Cyprus’s aid program. Asked whether a future EU-mandated bank levy can be categorically ruled out, Rehn said that “it can and there is no concrete case where it should be considered.”

SocGen: Cyprus bailout with unique stability levyZH

Cyprus Rapes Citizens with "Tax" on Deposits; Contagion of Idiocy is EverywhereMish’s

Cyprus Bank Deposits to Be Taxed in $13 Billion BailoutBB

Cyprus’ Bank Deposit Bail-innaked capitalism

The Cyprus bail-outSchumpeter / The Economist
Unfair, short-sighted and self-defeating

Cyprus Depositor Tax: Genius Plan or the End of the Euro?Karl Whelan / Forbes

Savers to share the pain in €10bn Cyprus bailouteuobserver

Savers forced to bear costs in Cyprus bailoutCyprus Mail

Where will Russia fit in bailout jigsaw?Cyprus Mail

Tough, painful decisionincyprus

Best of a bad dealincyprus

No cause for panicincyprus

10 billion euro Cyprus bailout agreedincyprus

A few Cyprus questionsMarginal Revolution

The tragedy of CyprusThe Real Economy

Savers bear brunt of unprecedented Cyprus bailoutReuters
The euro zone struck a deal on Saturday to hand Cyprus a bailout worth 10 billion euros ($13 billion), but demanded depositors in its banks forfeit some money to stave off bankruptcy despite the risks of a wider run on savings.

German finance minister asks Bundestag to agree Cyprus dealReuters
Germany's finance minister said on Saturday he would ask parliament to agree the outline of a euro zone bailout for Cyprus as soon as possible, to allow the island's international lenders to hammer out details.

Factbox: Outlines of Cyprus' bailout by the euro zoneReuters
Euro zone ministers struck a deal on Saturday to hand Cyprus a bailout worth 10 billion euros ($13 billion) to stave off bankruptcy. Under the program, the island's debt should fall to 100 percent of economic output by 2020.

Shock in Cyprus as savers face bailout levyBBC
People in Cyprus have reacted with shock to news of a one-off levy of up to 10% on savings as part of a 10bn-euro (£8.7bn; $13bn) bailout agreed in Brussels.

Cyprus: ten huge consequences of the bailout of a small countryChannel 4

Cyprus Bailout: Savers Lose Money In EU DealSky News
Savers race to ATMs as an unprecedented EU bailout of Cyprus demands all of them, including Brit ex-pats, pay a levy of up to 10%.

Cyprus eurozone bailout prompts anger as savers hand over possible 10% levyThe Guardian
Angry Cypriots try in vain to withdraw savings as eurozone bailout terms break taboo of hitting bank depositors

Savers to take a hit on their deposits as Cypus becomes fifth country to receive eurozone bailoutThis is Money

Cypriot bank deposits hit in €10bn bailoutFT

Anger as Cypriots wake up to savings grabFT

German parties voice approval for harsh terms of Cyprus bail outFT

Cyprus: A Brutal Lesson in RealPolitikPawel Morski

Greek FinMin: Deposits in Cyprus banks in Greece excluded from levyFamaugusta Gazette

Cyprus bailout a major game changerTradingFloor
This is a breach of fundamental property rights, dictated to a small country by foreign powers and it must make every bank depositor in Europe shiver.

Cyprus bailout a major game changerTradingFloor
This is a breach of fundamental property rights, dictated to a small country by foreign powers and it must make every bank depositor in Europe shiver.

Why today's Cyprus bailout could be the start of the next financial crisisWonkblog / WP
European officials have spent the past six years moving heaven and earth to ensure that no depositors with the continent's banks suffer a loss despite the financial strains the banks have been under… So is Cyprus different?

A stupid idea whose time had comealphaville / FT
A “one-off” often isn’t. Calling something after “stability” isn’t very stable. Saying that something is not a precedent usually makes it one.

Cyprus "Uncharted Territory" Sets Sell-Side ScramblingZH
The lesson here is that the EU's single-market rules will be flouted when the Eurozone, ECB, and IMF say so.

Shock in Cyprus as bailout brings bank account haircutekathimerini
Cyprus state broadcaster CyBC reported on Saturday that German Finance Minister actually entered the Eurogroup meeting on Friday proposing a 40 percent haircut on Cypriot bank accounts. Sarris stated on Saturday that this had also been the proposal of the International Monetary Fund.

The Meaning of CyprusMarc to Market
One general principle that the EU continues to pursue is tightening the linkage between solvency and sovereignty.  This is vital and the basis upon which a more integrated Europe will be built.    To the extent one becomes less solvent, one must surrender greater sovereignty.  Cyprus was insolvent.  A large swath of its sovereignty has been ceded to the EU. 

After Cyprus, Who Is Next? ZH
Europe, and especially Scandinavia which has consistently remained off the radar, is literally off the charts when it comes to LTD ratios.

The Cyprus Conspiracy IIMacro Man
The clear conclusions to us are that the Troika have gone too far, and Eurozone deposit insurance is now worthless. The Troika have let the cat out of the bag, and we do not think it likely that this will eventually be implemented as it is likely to result in protests, serious rioting, and possible assassinations (given the alleged involvement of the Russian mafia). The market reaction to this is likely to be rather bad.

Europe Does It Again: Cyprus Depositor Haircut "Bailout" Turns Into Saver "Panic", Frozen Assets, Bank Runs, Broken ATMsZH

Germany And IMF's Initial Deposit Haircut Demand: 40% Of TotalZH

For Everyone Shocked By What Just Happened... And Why This Is Just The BeginningZH

Deposit insurance, bank runs, international currencies, and the inflation taxWorthwhile
If the banking sector is too big, and if bank losses are too big, relative to the country's ability to pay, deposit insurance as a way to prevent bank runs is not credible and won't work in a country that cannot print.

Is Euro-geddon Nigh?Twenty-Cent Paradigms
One of the most basic lessons from the 1930's, as well as the semi-regular banking panics of the 19th century, is the importance of preventing bank runs. 

The Cyprus precedentFelix Salmon / Reuters
The big winner here is the ECB, which has extended a lot of credit to dubiously-solvent Cypriot banks and which is taking no losses at all. And although they might wake up bruised, the big Russian depositors are probably winners too, given that they risked losing everything and will end up losing just 10%. Finally, of course, there are all the hedge funds who have been betting that the Cypriot government won’t default: they’re all popping Champagne right now.

Facing Bailout Tax, Cypriots Try to Get Cash Out of BanksNYT

This Crazy Cyprus Deal Could Screw Up A Lot More Than CyprusHenry Blodget / BI
What do you think those other depositors in Spain, Italy, Greece, etc., are going to feel like doing when they realize that, if their banks ever need a bailout, they might have their deposits seized?

Cyprus Bailout: What Happened to Absolute Priority?Credit Slips
The problem isn't that Cypriot depositors have to make a co-pay, but that the co-pay costs are not being divvied up among Cypriot depositors and the other creditors and equityholders of Cypriot banks either per absolute priority or ratably.

Cyprus’ Stability Levy: Another sad euphemismYanis Farouvakis
I have no doubt that this decision will haunt them/us for decades.

Cyprus bails-in depositors to reduce cost of Eurozone bailout - a turning point in the Eurozone crisis?Open Europe

Cyprus bailout: Parliament postpones debateBBC
Cyprus parliament postpones session to discuss bank levyReuters

Cyprus left reeling from haircutCyprus Mail

Two Sides of CyprusBruce Krasting / ZH
Given the significance of what has happened it would be logical to assume that a huge safe-haven trade could be the market’s response.

A muddled and dangerous approach to CyprusThe A-list / FT
Mohamed El-Erian: European officials were right to look for a bold approach for Cyprus. But in compromising excessively on critical design elements, they risk ending up in the disruptive muddled middle: not going far enough to solve the country’s problems, and not being sufficiently careful in containing potential negative externalities.

What will savers do?Buttonwood’s / The Economist
Early in the crisis, a wise ex-colleague wrote to say that "Savers will pay for the mess. They are the only ones that have any money left."

Cyprus: Big banks orgasm, Markets crashFintag’s Newsletter
The stealing of bank deposits is a complete no no but the IMF and EU have done it anyway. The outcome will be very unpleasant.

Sowing the wind Coppola Comment
For the fact is that deposit insurance everywhere in the EU has now been undermined. The precedent has been set for insured depositors to suffer losses in order to protect Russian oligarchs and reckless banks. If the Eurogroup can impose this on Cyprus, it can do so elsewhere too.

Cyprus Parliament To Delay "Rescue" Vote Due To Lack Of Support, Despite ECB Pressure For Pre-Trade Open DecisionZH

Cyprus updateMarginal Revolution
This could go down as a blunder of historic proportions.  It also shows that EU governance already is a disaster and profoundly anti-democratic in the worst sense of that term.

JPMorgan Asks "Has Europe Bazookaed Itself In The Foot", Answers "Yes"ZH
‘Significant near-term risks after flawed Cypriot deal’

Full-court CyprusSelf-Evident
In short, my guess is that the (dangerous) haircut on deposits was the EU’s idea, while the (utterly insane) haircut on insured deposits was Cyprus’s alone.

Cyprus Bank Deposits to Be Taxed in $13 Billion BailoutGolem XIV
What this on-going bank crisis has shown over and over, is that no regulator, no parliament, no country will allow any of its systemically important banks to be found guilty of a crime.

Cyprus Details: Blackmail, Bulldozer Threats, Bank Holiday to Tuesday; Calls to Exit Eurozone, Other ReactionsMish’s

Some thoughts on German politics and the saver’s tax in CyprusCredit Writedowns 

FX Market Opens, EUR Hammered, CHF Bid; S&P To Open -30ptsZH

71% of Cypriots Say Parliament Should Reject BailoutZH

Bank of Spain says it sees no sign of deposit flightReuters
The Bank of Spain said on Saturday there were no signs of capital flight from Spain as a result of developments in Cyprus, where euro zone ministers are demanding that depositors forfeit some of their savings to avert bankruptcy.

The Cypriot HaircutKrugman / NYT
It’s as if the Europeans are holding up a neon sign, written in Greek and Italian, saying “time to stage a run on your banks!” 

German Commerzbank Suggests Wealth Tax In
Italy NextZH
"A tax rate of 15% on financial assets would probably be enough to push the Italian government debt to below the critical level of 100% of gross domestic product."

Beyond financial repressionalphaville / FT

Europe Scrambling With Last Minute Revision To Cyprus Deposit Confiscation PlanZH

Cyprus UpdateCalculated Risk 

Cyprus works on last-minute deal to soften bank levyReuters
Cyprus was working on a last-minute proposal to soften the impact on smaller savers of a bank deposit levy after a parliamentary vote on the measure central to a bailout was postponed until Monday, a source said.

Cyprus leader Nicos Anastasiades 'fights EU on bailout'BBC
Cyprus President Nicos Anastasiades says he is battling against eurozone demands that all bank customers pay a one-off levy in return for a bailout.

Europe Braces for Fresh Turmoil With Cyprus Deposit LevyBB

Germany would have protected insured deposits: SchaeubleReuters
Germany's finance minister said on Sunday Berlin would have respected the bank deposit guarantee on small savers' insured deposits but the Cypriot government, European Commission and European Central Bank (ECB) decided against this.

GOLDMAN: The Bailout Could Be A Great Deal For CyprusBI

S&P Futures Plunge To 1-Week Lows; Gold Jumps To 3-Week HighsZH

Cyprus Offers Fresh Scare for InvestorsWSJ

Cyprus Bailout - the final kick of the can?TradingFloor
By waiting until the Italian elections were over, the EU painted itself into a corner with Cyprus. Lacking other options, it was forced to go to the pockets of ordinary depositors, giving birth to fears of bank runs in Europe.

The War on Common Sense ContinuesTim Duy’s Fed Watch
Shocking, I know.  Who could have predicted that the populous would react poorly to an assault on depositors? Everyone. Everyone would have predicted this.  Everyone except, apparently, European policymakers.

Cyprus: The E.U. ‘Rescue’ That Risks BackfiringTIME
The sudden eruption of panic could still be contained; European officials on Sunday night were looking to revise the terms of the agreement ahead of a vote on the rescue package in the Cypriot parliament, in order to shield smaller depositors.

The possibility that depositors in larger economies might worry for the value of their savings, leading to panic and self-fulfilling crises elsewhere…The more damaging effect may be the continued erosion of faith in the legitimacy of democracy in the euro zone.

Teaching a lesson, lesson learnedalphaville / FT
The lessons that Germany and other northern euro zone countries thought would be learned from the Cyprus bailout:

The stupid idea, and the systemalphaville / FT
Ultimately the defence would seem to be that it was always clear a great deal of trust would be lost in governments forever as the price of passage through this crisis, and Cyprus was no different. Frankly, I think if we take up this political quietism and do not restore that trust, the crisis will be never-ending.

The Cyprus depositor pain-distribution ratioalphaville / FT
Changing the ratios would be significantly more progressive, obviously. We’ll find out soon whether such a change will indeed be made, and (just as important) whether it would still get enough votes to pass the Cypriot parliament.

Cyprus: The next
Charles Wyplosz: The Cyprus bailout package contains a tax on bank deposits. This column argues that the tax is a deeply dangerous policy that creates a new situation, more perilous than ever. It is a radical change that potentially undermines a perfectly reasonable deposit guarantee and the euro itself. Historians will one day explore the dark political motives behind this move. Meanwhile, we can only hope that the bad equilibrium that has just been created will not be chosen by anguished depositors in Spain and Italy.

F*ckin’ Europe. Again.The Reformed Broker
But what we do know is that, once again, the terms "bank run" and "loss of confidence" are making the rounds in all of the Chief Strategist notes and the macro masturbation newsletter complex. We don't want to hear terms like these.

Silliness In CyprusMebane Faber
…while I think it is absolutely moronic, I also think it is worth putting in context.  One thing that people miss is that there are a lot of threats to wealth.  One is taxes, one is outright confiscation, and one is inflation.

Cyprus: the world’s biggest “poker game”ZH
Harvinder Sian and Michael Michaelides of RBS: Big picture: This is toxic and a policy error.
Long bunds, sell the euro, sell periphery, Spain could underperform Italy, but nobody in the periphery wins.

Sell-Side Strategists Summarize Cypriot TsunamiZH
Roundup of views

The Rape Of Cyprus By The European Union & The IMFMark Grant / ZH
The European Union and the European Central Bank and the IMF have just advocated the confiscation of private property for their own indulgence.

Sowing the WindPragCap
For the fact is that deposit insurance everywhere in the EU has now been undermined. The precedent has been set for insured depositors to suffer losses in order to protect Russian oligarchs and reckless banks.

Before you panic, take a moment to think about Cyprus et alTradingFloor
I cannot urge this strongly enough, do not panic! The dust is far from settled and there will be plenty more of it in the days to come. Instead of trying to outsmart political sound bites using spot FX, look at the viable alternative of FX options.

Live Blog: European Markets React to CyprusWSJ

A Rubicon crossedMacroScope / Reuters
The finance ministers insist it is a one-off (as they did for Greece) but if investors and bank customers fear a precedent has been set, there could yet be a serious backwash for the euro zone. And all this for six billion euros?

Will Cyprus Become Creditanstalt 2.0?naked capitalism

Gas in Cyprus – how much of a guarantee?Nick Butler / FT

Cyprus deal is a dangerous gameDanske Bank (pdf)
Should depositors in Cyprus or other peripheral countries feel safe now? They may not. After all, deposit guarantee schemes do not guarantee against a levy. Depositors may also have to factor in that the one-off levy could inspire national governments to do the same thing. So the risk of bank runs has just gone up.

WTF Were They Thinking?Global Macro Monitor

Cyprus heading for bank run after bailout dealeuobserver
The Cyprus bailout deal on losses for all bank savers - from pensioners to Russian oligarchs - is turning into a bank run, with dangerous implications for other crisis-hit countries.

Cyprus parliament to consider deposit tax; European stocks fallReuters
Cyprus's parliament votes on Monday on a plan to seize money from bank deposits as part of an EU bailout, a move that has sent a shiver across the bloc, caused the euro to tumble and stock markets to dive.

S&P warns of socially explosive situation in euro zoneReuters
Standard and Poor's sees a high risk that Spain, Italy, Portugal and France will not be able to carry through necessary reforms as the unemployed become less willing to put up with austerity, S&P's Germany head Torsten Hinrichs told a newspaper.

Cyprus deposit grab sets bad precedentHugo Dixon / Reuters
There probably won’t be any immediate contagion from Cyprus to other crisis countries. After all, banking systems in Greece, Spain, Portugal and Ireland have recently been recapitalised. Meanwhile, the combination of Cyprus’ relatively huge banking sector and the fact that it is perhaps small enough to experiment with make it a special case. Even so, citizens in the rest of the euro zone now know that, if push comes to shove, their insured deposits could be grabbed too.

Tomorrow, Cyprus could vote to leave the euro. This is political dynamiteThe Telegraph
If the Cyprus deal represents a more assertive German approach, it will be far more difficult to actually trigger the OMT as that, in turn, depends on whether the debtor country will agree to be put on a bailout programme, with tough conditions (a prerequisite for it to tap the OMT). Cyprus is small enough to boss around, but Italy or Spain?

Cypriot Outrage Over Tax Could Derail Euro-Area BailoutBB
In a bid to ease a run on banks, depositors who keep their account for two years will receive securities linked to future revenue from the country’s gas reserves, the president said.

How Europe Let Cyprus Get Into This MessBusinessweek
The ugly Cypriot bailout reinforces a lesson from Greece: Peripheral nations’ membership in Europe’s financial inner sanctum creates moral hazard and a dangerous tendency toward instability.

Cyprus, current state of playThe Prodigal Greek
Here is the current state of play regarding today’s vote, information from various local sources. Session starts at 4pm local (GMT+2)

Cyprus: a chance for Putin to join rescue… and fight corruptionbeyondbrics / FT

Putin calls Cyprus levy 'unfair'euobserver

The fallout: Cyprus editionalphaville / FT
quick look at initial market reactions

Morning Briefing (EU/US): The Cyprus shockBNY Mellon
A synopsis of the key issues relating to the bailout

Cyprus and Other Market DriversMarc to Market

Cyprus on the edgeCFR

Your Cyprus Questions, AnsweredWSJ

A rescue plan that will kill usCyprus Mail / presseurop

Cyprus Update: DelayCalculated Risk

Delaying the not inevitable [updated]alphaville / FT

The Russian anglealphaville / FT
In 2011 alone, some $80 billion flowed out of Russia and much of that money had been channelled though Cyprus, according to the BND. Russians have deposited $26 billion in Cypriot banks, says the BND. That is well above the annual GDP of Cyprus.

Cyprus AgainMacro Man
It has to be impressed on Germany that crises are a lot more "Run Lola Run" or "The Great Escape" than "Faust": the point is to get out with minimum collateral damage first and mete out punishments and lessons in morality second

The Evolving Cyprus StoryMarc to Market

Is there any chance Cyprus could secure a better deal?Open Europe

We shouldn't over-state the risk of deposit-led contagion,but the Cypriot bailout deal is political dynamiteOpen Europe

How important is gas to Cyprus' economic and geopolitical future?Open Europe

How might a revised Cypriot bailout deal look?Open Europe

The Cyprus File – Why it Matters, Even to Americans!The Big Picture
Satyajit Das: It would be ironic if Cyprus, one the smallest countries in Europe with little over 1 million people and about 0.5% of the European Union (“EU”) economically, were to prove a key inflexion point in the crisis.

"Depositor Repression" May Spread To Swizterland, EURCHF SpikesZH

Goldman's Cyprus Post-Post-Mortem: "A Depositor “Bail-In” – And/Or – A Wealth Tax"ZH

Will Russia Kill The Cyprus Bailout?ZH

Cyprus Bailout Puts New Pressure on Europe’s BanksDealBook / NYT

Everything you need to know about the Cyprus bailout, in one FAQWonkblog / WP

How will the price-specie flow mechanism operate in Cyprus?Marginal Revolution

A short history of bank deposit and leviesMarginal Revolution

Island NightmaresKrugman / NYT
What is it about islands around Europe’s periphery?

Cyprus deposit tax reading [updated]Macro Exposure

Cyprus Can't Put 'Genie Back in the Bottle': O'NeillCNBC

Euro Officials Signal Flexibility on Cypriot Bank LevyBB
European policy makers signaled flexibility on the application of an unprecedented bank tax in Cyprus, seeking to overcome outrage that threatens to derail the nation’s bailout. European shares and the euro fell.

More on the Russian anglealphaville / FT
The hunt for an accurate Russian exposure figure to Cyprus continues. Here’s Danske Bank’s Vladimir Miklashevsky with the best estimate we’ve seen yet

Merkel Says "Cyprus is a Special Case" (So was Greece); Is Spain the Next "Special Case"? Portugal? Merkel Guarantees German DepositsMish’s
The real driver for this blatant theft is the re-election of Merkel.

Cyprus deal: the right intentions but major flawsbruegel
It is a pity that the Cyprus deal had some major drawbacks, despite the good intentions, and the lack of adequate information on the details of the financial assistance programme raises a large number of concerning questions.

Europe Welcomes the new CoCo DepositsAndreas Koutras
This was a deliberate policy decision and not one based in economics. After all the size is rather small, only 17billion. In other words, they chose the option to cut the deposits not because they had no other option but because they wanted to pass a political message.

Putin Lambasts Cyprus Bank TaxForbes

How Black Accounts Work - A Cyprus Connection?Bruce Krasting / ZH

Cyprus "Bank Holiday" Gets Another Extension, Bank Reopening Now Set For ThursdayZH

Legalised Banking robberyBreakingviews / Reuters

The Worst Case For Big Depositors In Cyprus: 15.26% HaircutZH
It appears that the worst case for Russians will be 15.26% - this is how much of all Cypriot deposits €100K and higher would be taxed by if there is 0% tax on the small deposits.

The Cyprus Bank Deal: What It MeansPIIE

Everything you need to know about the Cyprus bailout, in one FAQWonkblog / WP

How will the price-specie flow mechanism operate in Cyprus?Marginal Revolution

A short history of bank deposit and leviesMarginal Revolution

Island NightmaresKrugman / NYT
What is it about islands around Europe’s periphery?

Cyprus deposit tax reading [updated]Macro Exposure

Cyprus Can't Put 'Genie Back in the Bottle': O'NeillCNBC

Euro Officials Signal Flexibility on Cypriot Bank LevyBB
European policy makers signaled flexibility on the application of an unprecedented bank tax in Cyprus, seeking to overcome outrage that threatens to derail the nation’s bailout. European shares and the euro fell.

Russia: harmful Cyprus deal?Danske Bank (pdf)

SocGen: Cyprus bank bailout ranks second to Indonesia 1997alphaville / FT

The Яussians Are Coming! The Яussians Are Coming!Krugman / NYT

Cyprus Banking Crisis for DummiesWashington’s blog

Your Cyprus Questions, AnsweredWSJ

Initial thoughts on the Cyprus dealNordea
In our view, the bailout does not change the overall picture for the Euro area here and now even if the final bailout terms include a depositor haircut on deposits below 100k, which is the EU limit for deposit guarantees per bank. Indeed, there is little reason to expect serious contagion or outright bank runs in the periphery at the moment… However, the current deal clearly increases the longer-term risks.

Don’t Panic! Cyprus Will Adopt the Tax on Deposits and be Forgotten AgainWSJ

Why Cyprus ripples are hitting Russia harder than Ukrainebeyondbrics / FT

Germany and ECB blame each other for Cyprus levyeuobserver

[Opinion] The Cyprus bail-out deal is a disaster for the EUeuobserver
There is no longer equal protection for savers and confidence in the eurozone banking sector has received a body blow.

Financial markets haven't freaked out over Cyprus. That doesn't mean we're in the clearWonkblog / WP

EU lets genie out of the bottle in Cyprus bailoutMacroScope / Reuters

Don't get too excited about CyprusHumble Student
Based on my analysis, the worst fear of the pessimists, which is a bank run in the eurozone, will not materialize. Two key risks to this: Cypriot parliamentary approval and France.

Buiter: ‘Get in there, Cyprus!’alphaville / FT
The Cyprus bail-in is qualified good news, in the eyes of Citi’s chief economist Willem Buiter.

What are the Italian and Spanish press actually saying about the Cypriot bailout?Open Europe

Press review: ‘Blackmail has replaced solidarity’presseurop

Italy and Spain Shrug off CyprusBespoke
Equity benchmarks for Italy and Spain underperformed their European counterparts today following news of the proposed Cyprus bank bailout, but credit markets in both countries have seen a muted reaction.

Cyprus: Bond CFDs are calm for nowTradingFloor

Cyprus Could Default Even With Bailout WSJ
There have been 22 instances of deposit freezes in the past 30 years, and 20 of them resulted in a sovereign debt restructuring.

Only a Few European Financial Institutions Operate in CyprusWSJ
Just one major Western financial institution—the U.K.’s Barclays PLC—has an on-the-ground presence in Cyprus, according to ECB data.

Cyprus Bailout Shakes Trust; Markets Shake It OffWSJ

After Cyprus, eurozone risks transmission failure and running out of roadekathimerini
This is the point at which the links within the eurozone will begin to pop apart, when citizens will turn to Beppe Grillo-style solutions, to nationalists, extremists or to anyone who promises a different path. This is the point at which the vehicle stops functioning and the road ends.

JPMorgan: Opening "Pandora's Deposit Box" Means "More Extreme Deposit Flights In Future Crises"ZH
Cyprus is a "the death knell for an EU Common Deposit Guarantee scheme, which was to be an integral part of the Banking Union proposals"

Senior Bonds: Last Ones StandingWSJ
In the bailout deal that the euro zone and the IMF hammered out for Cyprus, one class of investors once again made a lucky escape: senior bank bondholders.
The Deeper Meanings of Cyprusof two minds
The deposit-confiscation "bailout" of Cyprus reveals much about the Eurozone's fundamental neocolonial, neofeudal structure.

Merkel’s Cyprus Gamble Explained as German Vote NearsBB
Germany’s role in imposing the euro bloc’s first levy on bank deposits, in Cyprus, shows Chancellor Angela Merkel’s dilemma in explaining to voters facing September elections why they should pick up the tab for another bailout.

The Lesson From CyprusDealBook / NYT
The crisis in Cyprus highlights the need for common European regimes on deposit insurance and on winding down failing banks.

Majority Of Cypriot Parties Refuse To Support Deposit-Loss LawZH

Some thoughts on German politics and the saver’s tax in CyprusCredit Writedowns

Insight: How Europe stumbled into scheme to punish Cyprus saversReuters
Just three weeks after being elected president of Cyprus, Nicos Anastasiades traveled to Brussels for his European debut last Thursday. His fellow leaders were all friendly enough.

“The Eurogroup continues to be of the view that small depositors should be treated differently…”alphaville / FT

Complete Eurogroup Statement On CyprusZH

A new instrument - here come debt/equity swaps!ObservingGreece
When it comes to an imposed hit, any differentiation must be made on the basis of risk awareness of those who could be hit…the plan also hits regular savers who had considered themselves to be protected…This mistaken differentiation, not the imposed debt-equity swap per se, is the enormous error underlying the Cypriot plan.

World from Berlin: 'Last Euro-Crisis Taboo Broken'Spiegel
The decision to tax ordinary savings accounts at Cypriot banks as part of a €10 billion EU bailout package has been met with sharp backlash at home and abroad. The measure signifies a new level of escalation and could be too risky, German commentators say on Monday.

Energy Reserves No Quick Fix for CyprusWSJ
The discovery of significant energy reserves in the eastern Mediterranean over the past two years has been held up as a beacon of hope for debt-crippled Cyprus.

Cyprus Will Make the Euro Harder to Swallow EverywhereWSJ
The idea that countries whose inability to rub along together had often brought the world to ruin could be so welded together remains utterly breathtaking when you stop to consider it,

Eurogroup Folds: Tells Cyprus To "Safeguard" Depositors Under €100,000 Euros; Angry Russians To Get Even AngrierZH

Oh look, the world hasn't ended!TradingFloor
Ken Veksler: The Cypriot debacle continues and goes from the sublime to the utterly ridiculous as each new headline hits the airwaves.

Why Cyprus has changed the paradigmTradingFloor
Steen Jakobsen: Whatever happens this week on the design of the levy on deposits it will constitute a major change where a financial tax is now more likely than ever despite the assurances of this being a one-off. We explore four key conclusions.

Cyprus overshadows EU leaders' Berlin meetingeuobserver
A dinner in Berlin on Monday with Merkel, Hollande, Barroso and the heads of 15 big companies should have focused on competitiveness. But the elephant in the room was Cyprus.

[Interview] Experts question EU money-laundering probe on Cypruseuobserver
As auditors begin work in Cyprus, some experts, such as the European chief of US due diligence firm Kroll, are questioning the value of the exercise.

EU defiant over €5.8bn raid on Cypriot savingseuobserver
EU officials remained defiant on controversial plans for a Cypriot bailout on Monday, the most tumultuous day for the euro so far this year.

A Bank Levy in Cyprus, and Why Not to WorryDealBook / NYT
Analysts were breathless waiting for impending disaster from the bailout in Cyprus. But nothing bad happened.

A much better alternative for CyprusFelix Salmon / Reuters
This is the deal that no one had the imagination to put on the table during all-night negotiations last week, and it makes a lot more sense than what we’re looking at right now.

TMM's Radical Plan for CyprusMacro Man
Let the old banks go bankrupt, leaving the ECB with EUR 9bn of losses and wiping out both the subordinated & senior bondholders (EUR 1.75bn). These new banks are now adequately capitalised & under EU law, the ECB will not be able to prevent their participation in Target 2 via the Central Bank of Cyprus. The ECB may well kick & scream, but there will be nothing they can do about it.

Cypriot crunch pointMacroScope / Reuters
Cypriot lawmakers are supposed to vote today on a bailout that hits at least some of its bank depositors but the president’s spokesman has said any such legislation is unlikely to pass. This could be brinkmanship but it doesn’t sound like it.

Gaming the Cyprus Negotiations (Updated)naked capitalism

Eurogroup distances itself from decision to tax small depositors in CyprusOpen Europe

What if the Cypriot parliament votes against the deposit levy?Open Europe

The Cyprus bailout fiascoColumbia Journalism Review

Europe’s Reckless Raid on Cyprus’s SavingsEditorial / BB

Cyprus: Follow the MoneyCATO Institute
Why now? European depositors’ money began to flow out of Cyprus’ banks back in 2010. Indeed, most European depositors have already found the exit door. Over that same period, non-Europeans (read: Russians) have increased their Cypriot exposure.

Cyprus President Says Parliament Will Still Reject Bailout Plan, "Making Other Plans"ZH

Cyprus Vote Delayed Once More As Latest Haircut Proposal Proves Insufficient For Parliament SupportZH

What will Russia do?alphaville / FT
Nicos Anastasiades is between a rock and a hard place. On one side there’s Cypriot citizens and official creditors — all, it seems, not liking the levy on deposits below €100,000 — and on the other, Russia.

What did the ECB tell Cyprus?alphaville / FT

Political blowback from Cyprusalphaville / FT

Cyprus – Oh the Irony!? Hinde Capital
What this should reaffirm to you all is how the handling of the crisis has only succeeded in heightening the risks associated with this current monetary order.  The excessive amounts of debt have continued to grow and are clearly not sustainable. Policymakers have resorted to draconian methods of expropriating private sector assets (households, pension funds and corporates) either by excessive explicit ‘taxation’ and/or stealth taxation administered by a policy of negative real rates to help reduce the fixed real burden of debts.

Cyprus: What’s Next?CFR
Whatever path is chosen, they need to move quickly.  The bank holiday is unsustainable for long on political and economic grounds, and if not resolved the question of euro exit could move to center stage.

Cyprus Set to Reject Bailout, Citing Tax on Bank DepositsNYT

Cyprus: It's not about the numbersekathimerini

Cyprus showcases Germany's clumsy leadership in Europeeuobserver

What does a guarantee mean?Buttonwood / The Economist
Why EU-wide deposit guarantee is a bad idea

Cyprus is rejecting its bailout. Now what?Wonkblog / WP

What is the eurozone doing?Wonkblog / WP
How does that not completely and utterly destroy the banking insurance system? Can the answer really be, “Your deposits are safe and fully insured, unless the federal government decides to arbitrarily take money out of them?” And if that is the actual deal being offered, then isn’t the banking insurance worthless? Why would you bank in the euro zone rather than, say, the United Kingdom?

So, are they stupid?alphaville / FT
…whether this evening’s vote on the bailout will go ahead is till unclear, let alone what the outcome will be — a question being asked by Credit Suisse’s William Porter and team seems apropos: What if they’re not “stupid”?

You say nein, we say oxialphaville / FT
That’s the result of Cypriot MPs’ vote on the current version of the bank deposit levy, rejecting it as a condition of the island’s bailout. That is the first no, after all these years and the bailouts, to the Troika.

Former Cyprus Central Banker Goes Off On The EU And Says The European Project Is DyingBI

Cyprus Finance Minister Resigns, President Refuses To Accept ResignationZH

Europe's Final Gambit: 20%-30% Haircut For Oligarchs To Force A Russian BailoutZH

Cyprus – A Total FiascoKiron Sarkar / The Big Picture

ECB Responds To Cyprus, Says "Will Provide Liquidity To Cyprus Within Existing Rules"ZH

Cyprus’s bad haircut dayFelix Salmon / Reuters

Cyprus rejects bailout deal euobserver
The eurozone was plunged into uncertainty on Tuesday after the Cypriot parliament voted to reject the €10 billion EU bailout plan by an overwhelming majority.

Cyprus versus the EUstapo – a mischievious ideaGolem XIV

What would you do: Part 2, the Island of SurpycCrooked Timber

Is Cyprus Too Small To Fail?Global Macro Monitor

Cyprus, Fight Club & Capital ControlsPawel Morski

Who knew about the Cypriot bank holiday and took capital flight beforehand?Credit Writedowns

The Cyprus bailout blame game beginsBrussels blog / FT
Almost all officials involved in the talks have said it wasn’t their decision to seize deposits from small savers.

In Cyprus, Europe Sets a New Standard for StupidityView / BB
The problem isn’t that Germany and its EU partners were selfish. It’s that they were stupid.

Cypriot Bank Deposits Paid Well, But Bank Loans Cost a Lot TooWSJ

Next: Capital ControlsZH

Is Spain Preparing For Its Own Deposit "Levy"?WSJ

Morning Bond Update: Postcard from CyprusTradingFloor
Cyprus had full focus in yesterday's volatile bond trading. Expect more of the same this session and watch out for any hard news from the EU, Cyprus or Russia.

[Opinion] The far-reaching implications of Cyprus' euro crisiseuobserver
If Germany disregards its steadily worsening image as the big bully of southern Europe, this will come back to haunt Berlin in other areas.

Germany to Cyprus: your banks might never re-openeuobserver
Germany has warned Cyprus the ECB will pull the plug on its two largest banks if there is no bailout programme, adding that the terms of the rescue will not be changed.

Cypriot minister in Moscow as Putin enters bailout crisiseuobserver
The Cypriot finance minister went to Moscow on Wednesday to seek alternatives to EU aid, in the latest twist in the island's bailout drama.

A Cypriot game of chicken alphaville / FT
Cypriot and European officials are discussing capital controls for when banks are due to open next Tuesday. Meanwhile the IMF is coming up with a plan to merge Cyprus’ two biggest banks into a ‘bad bank’, a source told the pair. The IMF wouldn’t be drawn on that. Where does the ECB stand in all this?

What now?MacroScope / Reuters
The slow motion Cypriot car crash of the past five days reached impact point last night when not a single lawmaker voted for the bailout with bank levy attached – the first time a euro zone legislature has simply said no. So what next?

The Cyprus fiasco has the hallmark of a classic whodunitRe-define
Someone somewhere took a decision that now no one no-where appears to have made

BizDaily: Cyprus crisis  – BBC (mp3)
What is going on in Cyprus? With the Cypriot parliament rejecting a bailout deal, and the EU standing tough, who will blink first? Could a proposed bank levy still go ahead and trigger a run on banks in other countries?

Cyprus throws bailout into disarray, seeks Russian aidReuters
Cypriot leaders held crisis talks on Wednesday to avert financial meltdown after rejecting the terms of a European Union bailout and throwing efforts to rescue the latest casualty of the euro zone debt crisis into disarray.

Cypriot banks on brink in Icelandic flashbackReuters
A small island on the edge of Europe teetering under the weight of its bust banks. Sound familiar?

ECB won't fund Cyprus banks forever : Austria finance ministerReuters
The ECB will not provide Cypriot banks with liquidity indefinitely unless a bailout is agreed and banks there may not be able to reopen this week as a result, Austrian Finance Minister Maria Fekter said.

Europe Weighs Cyprus’s Fate After Lawmakers Reject DealBB
Officials from the so-called troika are in Cyprus discussing further capital controls and the possible extension of a bank holiday through to the end of the week, a European official familiar with the talks said on condition of anonymity because the discussions are confidential.

Will Russia help Cyprus and does it matter for rouble?beyondbrics / FT
The rouble was under notable pressure versus US dollar as Cyprus lawmaker didn’t make situation clearer as they rejected deposit taxes and thus bailout scheme is in disarray.

Cyprus votes no before voting yesbeyondbrics / FT

Dramatic days ahead in CyprusBruegel
If a reasonable compromise is not reached, the Cypriot parliament does not reconsider, euro-area partners do not backtrack, and Russia does not step in, then we will witness a full meltdown of the financial system of Cyprus, bringing misery to its citizens. It could also endanger Cyprus’s membership of euro-area, bringing even more harm to the Cypriots. There has to be an agreement.

What next?Marc to Market

Cyprus Bailout: Stupidity, Short-Sightedness, Something Else?naked capitalism
Don’t arbitrarily, in the dark of night, out of the sight of democratic processes, try to make a grab into the whole banking sector. It makes a mockery of rule of law and the Eurozone.

Walking back from
Eurozone leaders’ radical step of putting insured depositors in Cypriot banks in harm’s way was not their only option. This column argues that none of the alternatives were pleasant but some were less ominous.

Cyprus is
The Cyprus rescue package has elicited sharp reactions. This column argues that a tax on deposits is logical given the limited options, but guaranteed deposits should be spared on fairness and systematic grounds; a 15% tax on big deposits would be enough. Contagion is unlikely since Cyprus is different. Italian and Spanish savers are already alert to surprises such as the 1992 Italian bank deposit tax.

Cyprus Update: what we have learnt so farTradingFloor
Lars Seier Christensen, co-founder & CEO, Saxo Bank: The most important game changer in years and the most frightening tool in the tool box has been pulled out in the open for a mere USD 5.8 billion.

What does a Cyprus deal look like?Marginal Revolution

Cyprus Is No Longer a Little Problem for the EuroWSJ
The latest chapter in the euro-zone crisis is no longer just about Cyprus. The tiny island's decision to reject the Troika's bailout plan and seek help from Moscow has tipped the episode into a new world of geopolitics and Western security.

Cyprus deal is a dangerous game - part IIDanske Bank (pdf)

Cyprus: Will the Mouse That Roared be Gored? (Updated)naked capitalism

Cyprus Shows How Not to Do a BailoutWSJ
The Cyprus crisis shows that, for all the faults with the financial crisis rescues in the United States, the European Union still finds ways to show us how poorly a bailout could be handled.

Cyprus, Taxes, and Russian Transfer PricingEconoSpeak

Cyprus is the latest casualty of Germany’s ‘one size fits all’ solution to the Eurozone crisiseuropp / LSE

Cyprus: Prokhorov to the rescue?beyondbrics / FT

All the Plan B’s for Cyprus Look DreadfulDealBook / NYT
Every day that the banks stay shut, the people of Cyprus may begin to appreciate the advantages of doing a deal with the euro zone.

Could Cyprus Become The 'Lehman Moment' for Europe?Econmatters

Cyprus blamed for decision to tax small saverseuobserver
The European Commission has said it was Cyprus itself that insisted on the most unpopular detail of its bailout. But the commission is not squeaky clean either, say others.

The most striking thing about the situation is that broader markets are taking assurances that Cyprus is a unique case at face value. European equities are flat for the week, and yields on peripheral sovereign debt have scarcely budged. Contagion looks like a non-issue. For that, at least, we can be thankful. Unless it leads to European Commission complacency, of course, leading officials to drive an even harder bargain—an possibly precipitate the sort of action, like a Cyprus exit, that might just send markets into a proper swoon. Things, we should have learned by now, can always get worse.

Round Trips to CyprusKrugman / NYT

Counterparties: Insane in the MediterrainFelix Salmon / Reuters

Insight: How Europe stumbled into scheme to punish Cyprus saversReuters
Just three weeks after being elected president of Cyprus, Nicos Anastasiades traveled to Brussels for his European debut last Thursday. His fellow leaders were all friendly enough.

Cyprus President To Rehn: "I Told You Tax Wouldn't Pass. Regards To Mrs Merkel"ZH

First they came for the deposits…alphaville / FT

Mind the sovereign, tooalphaville / FT

What the Cyprus Bailout Could Mean for Europe’s DebtDealBook / NYT
Some economists say that they are optimistic about reducing Europe’s debt levels after leaders took controversial steps in the Cyprus bailout.

Why is the ECB threatening to pull the plug on Cyprus? And how would it work?Open Europe

ECB starts egg timer on Cyprus ELAalphaville / FT

The Buchheit bat-signal, a few days onalphaville / FT

Cyprus: ‘Everyone to participate in bailout fund’presseurop

Cyprus struggling on bailout Plan Beuobserver
With no firm offer from Russia, Cypriot officials are scrambling to find alternative money to secure a €10 billion EU bailout.

Cyprus Plan B – phoenix or dodo?MacroScope / Reuters

Cyprus Bailout: What to do Now?naked capitalism

ECB to Push Cyprus Over the Brinknaked capitalism

ECB Gives Cyprus March 25 Liquidity UltimatumZH

The Cypriot TangleWSJ
The Cyprus-Russia-European Union triangle is becoming mighty tangled.

Cyprus: The Sum of All FUBARKrugman / NYT
Everything wrong, in one island package.

Cyprus: Endgame?CFR
One of the striking features of the Cyprus crisis is the extent to which the ECB is driving the process.  It was their threat to stop the flow of easy money to Cyprus that forced agreement on the earlier failed tax plan.  Now, their threat to cut Cyprus’ access to Emergency Liquidity Assistance (ELA) if the government does not have an EU-IMF approved program in place by Monday accelerates events.

Austerity and Cyprus Deposit TaxWSJ
Cyprus's bank-deposit tax is one of the least-costly ways for a government to do austerity.

Explaining ELAWSJ
The ECB Thursday seriously upped the ante in the Cyprus crisis. The Frankfurt-based rate-setters announced that if Cyprus didn’t finally iron out a deal with international creditors by Monday, then the ECB would cut off emergency funding to the country’s banks.

Russian PM lectures Barroso on Cypruseuobserver
Russian PM Medvedev on Thursday lectured EU commission chief Barroso over the Cyprus bailout, while leaked EU papers show panic behind the scenes.

Eurogroup boss: Cyprus levy is 'inevitable'euobserver
Eurogroup boss Jeroen Dijsselbloem told MEPs on Thursday that Cypriot savers will have to lose money no matter what the final shape of the bailout deal.

#CypriOut loomsFelix Salmon / Reuters

Bank holidays aren’t always funalphaville / FT
From Nomura about Cyprus: Indeed, now that the banks have been shut it seems hard to imagine that a reopening would not lead to a massive run on the banks.

How Much Russian Money Is in Cyprus?WSJ
Ever since Cyprus shut its banks last weekend, financial experts in Moscow have been trying to figure out how much of the money in Cypriot accounts derives from Russia.

Euro zone call notes reveal extent of alarm over CyprusReuters
Euro zone finance officials acknowledged being "in a mess" over Cyprus during a conference call on Wednesday and discussed imposing capital controls to insulate the region from a possible collapse of the Cypriot economy.

Of credible threats and plansalphaville / FT
Selected quotes from Eurogroup Working Group conference call notes

Cyprus: Out of Frying Pan into the FireMarc to Market
Clearly, the risk of an exit from the euro area has increased.    Many of the critics of EMU, who think it is better to be out, may be able to test their hypothesis.  We think Cypriots' lives will be made significantly worse on an exit.

Rolling the Dice in CyprusProject Syndicate
The task was never going to be an easy one: impose losses worth about €5.8 billion on lenders to the Cypriot government and depositors with the country’s banks. And now the rejection of that effort has led Europe to its latest impasse.

Russia to the Rescue? Why Moscow May Bail out CyprusPIIE
Suddenly, Russia has become a central player in the Cypriot financial crisis. On the very evening after the Cypriot parliament rejected a proposed levy on bank deposits that the Cypriot president had previously accepted as a condition for a bailout package of €10 billion, Finance Minister Michael Sarris flew from Nicosia to Moscow.

Euro Official On Cyprus: "Markets Believe We Will Find A Solution, This Might Not Be The Case"ZH
Cyprus pins hopes on creation of solidarity fund as ECB threatens to cut off lendingekathimerini

No contagion from Cyprus so farBruegel

Europe’s Cyprus Blunder and Its ConsequencesBruegel

Europe's Cyprus Crisis Has a Familiar LookBusinessweek
A small country cleans up its act and joins the international financial community. Money pours in from abroad. The cash is spent or lent unwisely under the noses of inattentive or ineffectual regulators. When losses mount, the money flows out as quickly as it came in. In the end, it’s the little guys who lose the most.

EU gives Cyprus bailout ultimatum, risks euro exitReuters
The European Union gave Cyprus till Monday to raise the billions of euros it needs to secure an international bailout or face a collapse of its financial system that could push it out of the euro currency zone.

How To Fix the Cyprus Bank Disaster in 3 Steps The Atlantic
There's a simple enough way to resolve the mess in Cyprus. It's called printing money.


De Grauwe: Euro area in ‘deep trouble’Credit Writedowns
He spoke to Bloomberg Surveillance about the situation in Cyprus specifically and in the euro zone more generally. A partial transcript

Euro Area Said to Weigh Closing Two Cyprus Banks, Asset FreezeBB
Finance ministers for the 17 euro countries are considering a plan to shutter the two biggest banks in Cyprus and freeze the assets of uninsured depositors

What happens if Cyprus can't agree a "Plan B"?Reuters
The EU has given Cyprus until the close of business on Monday to come up with a plan to raise nearly 6 billion euros and secure an international bailout.

Does size matter? Cypriot bank sector problem went overlookedReuters
There was no official red flag that Cyprus's oversized banking sector posed a big risk to its economy until last year, when the European Union set up tools to monitor such imbalances, a Reuters review of EU reports dating back to 2003 showed.

We're not Cyprus number two, Latvia saysReuters
Baltic state and euro zone aspirant Latvia, already home to sizeable deposits of Russian money, is not expecting an increase in flows of deposits due to the woes in Cyprus, its bank regulator said on Thursday.

Krugman’s Bad Math on Cyprusnaked capitalism


Bailouts, Bail-ins, Haircuts and All That: Program Notes for the Cyprus Banking DramaEconoMonitor
Because banking losses are real losses, someone always ends up bearing them. The only question is who.

What happens if a Eurozone NCB goes rogue?self-evident
So what would happen — what physically would happen — should the ECB governing council vote to terminate ELA to Cypriot banks, but the Central Bank of Cyprus provided it anyway?

Cyprus Set to Debate Bailout Bill as ECB Deadline LoomsBB
Cypriot lawmakers will begin debate today on legislation to unlock bailout funds and prevent a financial collapse with a ECB deadline to cut off funding for its lenders in three days.

Cyprus’s Three-Way Game of ChickenView / BB
What’s amazing about this fiasco is that Europe’s leaders had almost a year to think about how to avoid it. Ever since Greece restructured its government debt, which made up a large share of Cypriot banks’ investments, it has been apparent that the banks would need a major recapitalization.

End of an Era: Cypriot Financial Sector Faces CollapseSpiegel
The disastrous financial situation in Cyprus is largely a result of the country's crumbling banks. For years, the island nation profited from its bloated financial sector, but now it will likely have to liquidate its two largest banks. In Nicosia, government leaders fear that could decimate the economy.

Search for 'Plan B': ECB Sets Ultimatum as Cyprus Moves toward DealSpiegel
Saying it cannot guarantee emergency liquidity funding to Cypriot banks beyond Monday, the European Central Bank is pressuring Nicosia to find the 5.8 billion euros needed to ward off insolvency. Leading politicians on Thursday agreed to establish a "solidarity fund" and rejected any kind of bank levy.

Euro Area Said to Weigh Closing Two Cyprus BanksBB
Euro-area finance chiefs, pressuring Cyprus to shrink its banking system as the condition for a bailout, are reviving demands they jettisoned last week as too extreme, four European officials said.

Evaluating Potential For Euro Periphery Deposit Contagion - Goldman Sachsefxnews

Cyprus Should Start Printing Its Own Money Soon - Commerzbankefxnews


Cyprus 'business model' was no mystery to EUeuobserver
Be it the German finance minister, ECB officials or the head of the Eurogroup - they all agree on one thing: Cyprus must scrap its "unsustainable business model" based on low taxes and attracting large amounts of bank deposits from abroad, mainly Russia.

Morning Briefing: The options facing CyprusBNY Mellon

Europe, Russia Reject Latest Cyprus Bailout Plan Before It Is Even Voted By ParliamentZH

Market’s Illusion of Calm Over CyprusWSJ
"The situation in Cyprus is not good," analysts at Nomura said with darkly comical understatement at the start of this week. And yet the financial markets have held remarkably steady.

The Cyprus bailout controversy in German media and politicsBruegel
We want to summarize reactions among politicians and German press views. The Eurogroup set up the details of a EUR 10 billion bailout package for Cyprus on Saturday, 16 March. This programme was heavily criticized in Germany, especially due to the tax on deposits below EUR 100 000. Yet, the Cypriot Parliament voted against this measure on Tuesday which is widely perceived as blackmail in Germany. Most commentators insists that Cyprus needs to come up with the agreed EUR 6 billion in order to receive the remaining sum from its European partners.

TMM thoughts on CyprotoxinsMacro Man
Cyprus is thus in the early stages of experiencing what it would do were it to leave the Euro: (i) a household liquidity crisis, (ii) a paralysed financial system, (iii) a collapse in monetary velocity, (iv) a large loss of national wealth, (v) capital controls, (vi) shortages of imported basic goods [trade credit for Cyprus now non-existent],  and (vii) an exceptionally deep recession.

Cyprus on the brink of euro exit after ECB ultimatumeuobserver
Cyprus is on the brink of becoming the first country to leave the euro, after the ECB on Thursday issued an ultimatum on its bailout.

[Analysis] Cyprus 'business model' was no mystery to EUeuobserver
EU politicians are saying Cyprus must scrap its "unsustainable business model." But data shows the writing was on the wall ever since the island joined the euro, five years ago.

Revised TARGET2 Paper & Implications for ECB of Cyprus ExitForbes
Cyprus exit would probably wipe out ECB’s capital base.

CONTROLS (in Cyprus)alphaville / FT
This is being reported as the capital control bill that’s close to being enacted in Cyprus

Cyprus – The nuclear optionGolem XIV
Europe, the ECB and the IMF have put a gun to Cyprus’ head. The threat has been made public – you do as we say and seize depositor’s money or else…Either Cypriot members of parliament ignore the will of the Cypriot people or the ECB stops supporting Cypriot banks and they implode.  Which would mean either Cyprus leaves the Euro and re-introduces its own currency (which it could do)  or it tells its people that ALL their money is now gone.

Is the ECB Firing Blanks?WSJ
On Thursday, the ECB put a gun to Cyprus’s head, but it could be loaded with blanks.

Guest post: Cyprus bribe-takers and tax cheats to the rescue beyondbrics / FT

Options for CyprusBruegel

Capital controls in Cyprus: the end of Target2?Bruegel

Why Cyprus Will Pay DearlyDealBook / NYT
There are no good alternatives, the author contends. But the longer it takes for Cyprus to recognize how bleak its situation is, the greater the damage.

The Latest Plan in CyprusEconomist's View
There's "still no immediate path to a lifeline."

Cyprus MPs pass bank laws, start bailout talkseuobserver
Cyprus edged back from the brink of bankruptcy on Friday after MPs agreed to a series of emergency reforms - including capital controls - in a bid to avoid financial meltdown.

Everything you need to know about Cyprus in one FAQWonkblog / WP

If Cyprus was AmericaWonkblog / WP

The Five Strangest Ways to Solve the Cyprus Crisis Wonkblog / WP

Cyprus: What are the Russians playing at?Felix Salmon / Reuters
There’s no doubt that the best outcome for Cyprus, and for the EU, would be for Russia to extend its help now, before Cyprus’s banks reopen on Tuesday. But Russia doesn’t want what’s best for Cyprus, or for the EU: Russia wants what’s best for Russia. And the way it’s acting reminds me of nothing so much as a classic Wall Street bear raid, designed to drive down the price of something you want to be able to pick up very, very cheap. What’s more, it might even work.

Full circle in CyprusOpen Europe
Full circle in Cyprus: The deposit levy is on the table again

Intransigence in the face of Cyprusalphaville / FT
The single currency, and financial markets generally, have been stubbornly stable in the face of the Cypriot mess (ongoing, obvs) and it’s not really clear why.

Regrets Pour In; Cyprus Parliament Passes Bailout Plan; Will Her Highness Approve? - Mish's

Cyprus Capitulates to Eurozone (Updated)naked capitalism
As we’ve indicated, the big risk coming out of the cramdown of Cyprus is a resumption of the flow of deposits out of periphery countries, which had been underway last year but was arrested by the introduction of the OMT. You’d be nuts to keep your money in a Spanish bank after the brutal treatment of Cypriot depositors.

Repeat After Me, Cyprus Is (Was) Not a Tax Havennaked capitalism

Cyprus UpdateKrugman / NYT
Icelandization, it seems.

Europe’s Cyprus Blunder and Its ConsequencesPIIE
Unlike in previous euro-crisis episodes, there is little the ECB can do alone. The problem is fiscal at the core and must be addressed by elected leaders. They may conclude that it is best to let Cyprus default, impose capital controls, and leave the euro area, an option that was reported to be explicitly considered in European policy circles. But such a move would violate the promise of European leaders to ensure the integrity of the euro area, no matter what, and potentially set off a chain reaction, including possible bank runs in other euro area member states, starting with the most fragile ones, such as Slovenia and of course Greece.

The Week That Was – Money Centers in FocusBruce Krasting
What could happen if people start pulling their money out.

Cyprus and Eurozone Bank DepositsThe Street Light
While I don't know how significantly confidence in the eurozone periphery's banks have been shaken by this week's events, I do have an idea of what I will be keeping an eye on over the coming weeks and months: deposits in banks in Greece and Spain.

Cyprus Struggles to Meet Bailout Demand as Deadline LoomsBB
European and Cypriot officials were locked in talks to find a formula to avert the Mediterranean island’s financial collapse, struggling to forge consensus on a bailout package before the ECB cuts funding.

Cyprus Aims to Meet Bailout Terms Today, Deposit Tax DebatedBB
Cyprus aims to complete a plan today to meet the terms of a European bailout that may include tapping bank deposits, its finance minister said, as the Mediterranean island races to avert financial collapse.

Cyprus Officially Passes Capital Controls Into LawZH

JPMorgan On The Inevitability Of Europe-Wide Capital ControlsZH

Cyprus Deposit Levy Vote Delayed, Will Go "Down To The Wire" As Up To 70% Deposit Tax Contemplated For SomeZH

Former Cyprus Central Bank Head And Senior Fed Economist: "The European Project Is Crashing To Earth"ZH

"A Brief History Of Money In Cyprus" As Gasoline "Runs" Are About To Be UnleashedZH

Cyprus Deal... Or No Deal: "Anonymous" Rumor vs Euro CommissionZH

Unsecured Depositors Of The World, Unite... And Get The Hell Out Of These CountriesZH

On the Circus in EuropeBruce Krasting / ZH
Two possibilities - Either this was a completely bungled effort in Brussels. Or this this was a deliberate effort to weed out the weak members of the EU. If the intent was the latter, this will not stop will little Cyprus.

Cyprus weighs big bank levy; bailout goes down to wireReuters
Cyprus conceded on Saturday to a one-off levy on deposits over 100,000 euros in a dramatic U-turn as it raced to satisfy European partners and seal an 11th-hour bailout deal to avert financial collapse.

Analysis: "Lex Cyprus" will set precedents for closer EU unionReuters
Lawyers have a saying that hard cases make bad law.

Euro zone finance ministers to meet on Sunday over CyprusReuters
Euro zone finance ministers will meet on Sunday evening to discuss a possible rescue package for Cyprus, the head of the Eurogroup said in tweet.

Cypriot parliament to debate levy only after Eurogroup meeting: officialReuters

Will Cyprus be the pin to burst euro balloon? - The Telegraph
It’s tempting to dismiss events in Cyprus as insignificant. Mainstream politicians and investors, desperate to keep the flame of Western recovery flickering and the asset price rally on track, insist that the country is “a special case”.

If capital controls are introduced in Cyprus, it is the end of the single currency in all but nameThe Telegraph

The Cyprus bail-in: A bungled bank raidThe Economist
European leaders tear up the rules, with unpredictable consequences

Just when you thought it was safe… - The Economist
Bailing out Cyprus was always going to be tricky. But it didn’t have to be like this

Buttonwood: The financial-repression levyThe Economist
There is more than one way for savers to lose out

The Cypriot gasfield: Hot airThe Economist
Could gas save Cyprus? If only it were so simple

Why Cyprus Matters (And The ECB Knows It) Mark Grant / ZH

Iron Chancellor Returns: Merkel Can't Contain Anger over CyprusSpiegel
Angela Merkel is known for her measured approach to even the most controversial issues. The crisis in Cyprus, however, has enraged the German chancellor. In parliamentary meetings on Friday morning, she did little to disguise her fury -- though she shoulders some of the blame herself.

What If Cyprus Left The EuroZH
BofAML: Cyprus defaults, exits, confidence is shaken – in this scenario, the possibility of a country exiting the Eurozone could revive contagion risks, only to be mitigated by much more forceful policy reactions.

Banco de Mattress’ looms for CyprusJohn Dizard / FT
Of course the authorities anticipate some of these problems, but there are always new ones. Particularly after the initial shock of control imposition wears off, the population turns from productive effort to finding ways to game the system. Some cultures are more resistant than others to this change in character, but in all cases social cohesion and respect for law are eroded over time.

The eurozone after CyprusGavyn Davies / FT

Raiding Cypriot accounts will not save the banking systemSober Look
The Eurosystem's exposure to Cyprus is simply insignificant on a relative basis. The ECB's balance sheet is still massive. It can generate more than enough interest income in a few months to cover the losses of Cypriot banks' defaulting on their ECB loans. So why throw good money after bad?

Cyprus-Troika Talks "Delicate" But Schaeuble "Won't Be Blackmailed"ZH


Repeated meetings ahead of key Eurogroup sessionekathimerini

ECB's Nowotny says expects no Cyprus contagion risk: paperReuters

Cyprus faces last ditch chance to save economyReuters
Cypriot President Nicos Anastasiades, seeking a last-minute reprieve from financial meltdown at talks in Brussels on Sunday, has a "very difficult task" ahead of him if he is to save the island's economy, a government spokesman said.

Cyprus’s Fate Hangs in the Balance as ECB Deadline LoomsBB
Cyprus’s fate hangs in the balance as euro-area finance ministers meet today to decide whether the tiny Mediterranean island has done enough for a bailout that will avert its financial collapse.

Cypriot president flies to Brussels for bailout talksBBC
Cypriot President Nicos Anastasiades is on his way to Brussels as his country continues to seek a last-minute deal to avoid possible bankruptcy.

Cyprus dreams left in tattersThe Telegraph
After a week of financial turmoil, Colin Freeman in Limassol finds that Cypriots want out of the euro, and British expats want out of Cyprus


As Deadline Nears, Cyprus Scrambles to Devise a BailoutNYT

Cyprus seeks 11th-hour deal to avert financial collapseCyprus Mail

With Russia "Demanding Cyprus Out Of The Eurozone" Here Is A List Of Possible Russian Punitive ReprisalsZH

Cyprus Bailout Needs Rise By €2 Billion As Conditions Deteriorate RapidlyZH

Do Capital Controls Mean Cyprus Has Already Left the Eurozone?Tim Duy’s Fed Watch


Cyprus talks struggle in BrusselsFT

Mad scramble to save Bank of CyprusCyprus Mail

Eurogroup on Cyprus starts with two-hour delayeuobserver

A gathering of eurozone finance ministers aimed at sealing a bailout deal for Cyprus before a Monday deadline set by the European Central Bank was delayed by at least two hours, as talks between the Cypriot President and the heads of the EU Council, commission, IMF and ECB ran late.

TIMELINE: Anastasiades to lenders: do you want to force me to resign?Cyprus Mail

Archbishop: those who are to blame should be put on trialCyprus Mail

Highlights-Comments from eurozone Cyprus talksCyprus Mail

Anastasiades seeking last-minute Cyprus reprieve in BrusselsCyprus Mail

New Demands Every Half-Hour From IMF; Can Cyprus Be Saved? Impossible MathMish’s

Tales from the Coffeeshop:The terrible price of pride and stupidityCyprus Mail

WRAPUP 6-Cyprus in last ditch EU talks to save economyReuters

HIGHLIGHTS-Comments from euro zone Cyprus talksReuters

Cyprus Teeters on Brink as Euro Chiefs Battle CrisisBB

Cyprus crisis could spread, Spain's economy minister warnsEl Pais

Four Feckless Features Of A Post-Cyprus EuropeZH

Authored by Gavyn Davies, originally posted at The FT,

What comes after finance in Cyprus?Bruegel

The prominent role of Cyprus's financial services is probably over anyway, irrespective of the actual content of the forthcoming agreement between the troika and Cyprus. I put together some simple tables showing the structure of the economy in Cyprus and in three other countries that suffered from massive banking crises during the past few years: Ireland, Iceland and Latvia (see a December 2011 policy contribution of mine comparing the adjustments of these three countries). Here are some observations.

Meanwhile, Cash Exodus From Cyprus Surges Despite Bank Closures, Capital ControlsZH



Eurogroup Statement on Approved Cyprus BailoutCredit Writedowns

Cyprus Bailout Deal TermsCredit Writedowns

Scratch one stupid idea [Updated]alphaville / FT

TIMELINE: Bailout deal reachedCyprus Mail

Cyprus agrees €10bn bailout dealFT

Cyprus: It’s not over yetFelix Salmon / Reuters

Deal Reached, Damage DoneMish’s

Eurozone agrees Cyprus bailout 2.0euobserver

Cyprus' Laiki bank is to be wiped out and depositors in Bank of Cyprus will take a hit under Cyprus' new bailout deal. But details remain sketchy.

IMF Statement on CyprusIMF

Rampapalooza As Cyprus-Troika Reach Deal (Updates)ZH

"Cyprus Is The Homage Europe Pays For The Denial Of A Systemic Crisis"ZH

Cyprus Said to Reach Tentative Deal to Avert DefaultBB

Cyprus Salvaged After EU Deal Shuts Bank to Get $13BBB

Last-minute Cyprus deal to close bank, force lossesReuters
Cyprus clinched a last-ditch deal with international lenders to shut down its second largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians, in return for a 10 billion euro bailout.

Anxious, angry Cypriots face uncertain futureReuters

Cyprus to get first tranche of bailout in early MayReuters

Cypriot parliament does not need to vote on bailout: German finance ministerReuters

Senior bondholders face haircut in CyprusReuters

This deal sends more constructive signals – credibility still hurtNordea
In the short term, the agreement will boost risk appetite. In the longer term, the debacle further hurts the credibility of Euro-zone countries in addressing their problems.


Will Cyprus Be Contained?naked capitalism

Cyprus celebration not likely sustainableTradingFloor

The market kneejerk reaction to the Cyprus solution may already be behind us, and if not, is not likely to hold much longer as a number of ugly precedents have been set that are likely to weigh on the Euro from here.

Guest post: Russia right to refuse Cyprus bail out but should back a strong EUbeyondbrics / FT

Cyprus, the snap takesalphaville / FT

From UBS’s Reinhard Cluse, SocGen, Simon Derrick at Bank of New York Mellon, Nomura, Credit Suisse, Barclays, Monument Securities.

Cyprus bailout in place - but crisis not solvedDanske Bank (pdf)

Just after midnight, the Troika and Cyprus struck a last-minute deal to avoid a complete bankruptcy and potential euro exit of Cyprus

Did Russia lose at Russian roulette?alphaville / FT

At this point it’s safe to say that if the Cypriot government was trying to coddle Russian depositors by initially agreeing, way back on March 16, to penalise small depositors along with larger ones, that has backfired badly.

Best of a bad jobHugo Dixon / Breakingviews

There are two lingering doubts. Will capital controls be imposed? And is Cyprus’ debt sustainable given the economy will be clobbered?

Cyprus is saved! For now...TradingFloor

Ken Veksler: Cyprus is saved. Well apparently and perhaps only for now... Having reached a “deal” at the last minute last night, I don’t get the sense anyone is breathing too big a sigh of relief, if I’m honest.

Could Cyprus leave the Eurozone but stay in the EU?Open Europe

Historically, political expediency has trumped EU law. Although it would not be clear cut or easy – and involve a legal stretch – we believe that in order to take a swift decision and avoid a Treaty change EU leaders could (and most likely would) use existing provisions in the EU treaties to allow for a Cyprus euro exit.

Goldman's Cyprus Post Mortem And A Review Of The Forced "Depost-To-Equity" ConversionZH

Russian PM says "stealing continues" in CyprusReuters

Moscow reacted with anger on Monday to a European Union bailout of Cyprus that will result in heavy losses for foreign depositors at the Mediterranean island's banks, many of which are Russian.

Will Putin attempt a last-minute Cyprus rescue?Anatole Kaletsky / Reuters

One of the mysteries of the Cyprus crisis has been the lack of response from Russia, despite the obvious strategic opportunities, not just to protect its offshore deposits, but also to exploit the island’s strategic location and its military and energy potential. A possible explanation is that Europe’s indecision also paralyzed Russia -  until last night.

Flash Analysis: Cyprus kept in the euro, but at what cost?Open Europe

What to look for in the Cyprus dealMarginal Revolution

Cypriot bank restructure: The good, the bad and the uglyTradingFloor
Neil Staines: After the modest bounce in risk assets on the open to this week’s financial markets ... I would anticipate that the EUR will lose its lustre, and that we will be trading at new lows for 2013 by the time we enter April.

The new Cyprus deal: victory of common senseBruegel
The new deal on Cyprus does not only have the right intentions, but averts the two major flows of the previous deal:

The Eurogroup Statement on Cyprus Translated.Macro Man

CONTROLS continued, as is their wontalphaville / FT

Pessimal Currency Area TheoryKrugman / NYT
Cyprus: why not the worst?

Next Up For Cyprus: DepressionZH

The thin end of a very worrying wedge?qfinance
To most, the recent decision to fund the bailout of the Cypriot banking system through a sizable tax on larger depositors is little more than a news story.  However my view is that it risks changing the behavior of large depositors.

Cyprus: The deal that is not a deal but an understandingTradingFloor
Steen Jakobsen: This weekend's 'deal' has no winners - only losers. It left European decision-making bleeding and without hope of recovery as the EU Commission and IMF exchanged harsh words all in the name of a power game, never for the sake of future Europeans.

After Cyprus, eurozone faces tough bank regime: Eurogroup headReuters
A rescue programme agreed for Cyprus on Monday represents a new template for resolving euro zone banking problems and other countries may have to restructure their banking sectors, the head of the region's finance ministers said.

Capital controls on Cyprus seem to have been avoided (or not?)Bruegel
Overall, a good deal has been reached given the bad circumstances of end of last week. It is now crucial to provide a credible timeline for the opening of banks. Moreover, the Cypriot authorities should clarify asap what “administrative measures” are exactly contemplated. Those measures should not limit capital flows across Cypriot borders as otherwise they would be capital controls. Capital controls would ultimately mean that a euro anywhere is not a euro everywhere anymore.

Why the new Cyprus deal sows the seeds of the next European crisisWonkblog / WP
The next time there is a banking panic in Europe, it will move much faster, and be much harder to control, than those of the recent past, as depositors try to get ahead of future losses and capital controls. And that’s a scary proposition indeed.

Waiting for the fall-outFree exchange / The Economist
Several big questions remain. The most immediate concerns when Cypriot banks will reopen, what will happen to deposits at that time, and how the Cypriot government will respond. Major deposit flight is expected, and it is widely anticipated that temporary capital controls will be imposed.

Coming soon to uninsured deposits near you – Free exchange / The Economist
In other words, Cyprus is absolutely a unique case, BUT if trouble should come to banking sectors elsewhere in the euro zone hitting uninsured depositors would seem a sensible way to go.

European Markets Sliding (Fast)ZH
A Word Out Of Place Sends Europe TumblingZH

Cyprus Church Loses EUR100 Million, Curses Those ResponsibleZH

Cypriots Mourn Collapse of Livelihoods as Bailout Crushes BanksBB
While they may be staying in the euro for now, people on the island are lamenting the demise of an economy built on the banks that ended up sinking it.

Putin Warms to Cyprus Deal With Order to Renegotiate LoanBB
Russian President Vladimir Putin signaled acceptance of an accord reached by Cyprus on an international bailout, a week after berating an earlier rescue plan as “unfair, unprofessional and dangerous.”

Russia backstops Cyprus bailout despite angerReuters
Russia signaled on Monday it would backstop the European Union's bailout of Cyprus despite anger that the weekend rescue deal would impose heavy losses on uninsured depositors, many of them Russian.

EU Commission says capital controls in Cyprus must be briefReuters
Cyprus may impose controls on the movement of capital but only for a temporary period of time, the European Commission said on Monday, hours after the island sealed a deal to close its second-largest bank in return for international aid.

Cyprus crisis puts Austrian bank secrecy on agenda Reuters
Cyprus's financial crisis has put Austria's centuries-old tradition of banking secrecy under fresh scrutiny, posing a potential political problem for Vienna as it faces European Union and U.S. pressure to crack down on tax cheats.


Cyprus Rescue Deal Establishes Addresses Important PrinciplesDealBook / NYT
Hugo Dixon: The bailout deal that Cyprus reached with its euro zone partners makes the best of an extremely bad situation but there are lingering doubts on capital controls and the effect the debt will have on the economy, the author writes.

Success of Cyprus deal dependent on 'social consensus'euobserver
The success of the Cyprus bailout deal will depend on the social consensus around it, says Brussels, with the island's GDP expected to dive as the size of the banking sector is drastically cut.

Dijsselbloem, do remember that careless talk costs lives…*alphaville / FT
The Eurogroup head was in triumphalist form on Monday, claiming direct credit for having sent Cyprus into a parallel eurozone (capital controls, economy obliterated).

Cyprus Capital-Controls Q&AWSJ
Following the deal between Cyprus and its international creditors on a bailout, there are just as many questions as answers, particularly surrounding the imposition of capital controls. Here our reporters address some of the most pressing issues.

Another "Euro Is Saved" Moment in PicturesMish’s

A “Deep Recession” is Coming to CyprusPragCap
Athanasios Orphanides the former governor of the Central Bank of Cyprus was Bloomberg this morning discussing the inevitable economic decline (via Bloomberg Surveillance):

Everything You Need to Know About Cyprus, Q&A StyleWSJ

Eurogroup’s Dijsselbloem Says "Banks Should Save Themselves"ZH

ECB’s reaction to the agreement on the Cypriot macroeconomic adjustment programmeECB


The Dijsselbloem PrincipleFelix Salmon / Reuters
Dutch finance minister Jeroen Dijsselbloem, the current head of the Eurogroup, held a formal, on-the-record joint interview with Reuters and the FT today, saying that the messy and chaotic Cyprus solution is a model for future bailouts. Those comments are now being walked back, because it’s generally not a good idea for high-ranking policymakers to say the kind of things which could precipitate bank runs across much of the Eurozone. But that doesn’t mean Dijsselbloem’s initial comments weren’t true; indeed, it’s notable that no one’s denying them outright.

Dijsselblowing itWonkblog / WP
And from here forward, depositors in European banks know that they are on notice, from no less than the Eurogroup president: If your money is in a bank that runs into problems, you’re going to pay. It is an admirable victory for market purism, and a loss for those who want to keep the European financial system in business. Djisselbloem is relatively new in the job, having been finance minister only since November and Eurogroup president since January. It is not an auspicious start.

Euro chief spooks markets with Cyprus commentseuobserver

A New Business Model for CyprusProject Syndicate
Javier Solana: Today, the small, divided island of Cyprus is facing yet another economic storm. But there is light on the horizon: economic hope in the form of huge offshore gas reserves, which promise not only to transform the island’s economy, but also to improve regional cooperation and revive reunification efforts.

Guest post: The case for Cypriot national equity alphaville / FT

Cyprus: The Unique Template in Nine ThesesMarc to Market

(from Sunday, but excellent) The broken Euro Coppola Comment

Cyprus : The Key is a Long Term Time Horizon (aka Buy and Hold This)Mebane Faber
Nothing like a 99% drawdown (if/when the market reopens) to rattle the nerves of a buy and hold apologist.

Act II in Cyprus: Securing a Much Improved DealPIIE
Ironically, the euro area can thank the Cypriot parliament and Russia for rebelling the first time around, thereby backing the Cypriot government into a corner and averting the Troika’s initial policy mistake of acceding to the Cypriot government’s demands to impose the levy on insured deposits.

Eurozone’s bully boys will come to regret penalising tiny CyprusThe Telegraph
No monetary union can expect long to survive this sort of self-inflicted political battering. If Europe can make such a horlicks out of tiny Cyprus, just think what might happen when the crisis once again laps at the doors of larger economies such as Italy, Spain and Portugal.

INSIGHT-Money fled Cyprus as president fumbled bailoutReuters
As new President Nicos Anastasiades hesitated over an EU bailout that has wrecked Cyprus's offshore financial haven status, money was oozing out of his country's closed banks.

Have The Russians Already Quietly Withdrawn All Their Cash From Cyprus?Reuters


Cyprus banks and UK depositsCoppola Comment
I'm writing this brief explanation for those who are unsure about the status of deposits held in UK outposts of Cypriot banks, and to confirm the situation for people with deposits in Cypriot banks in Cyprus itself.

(joke) Cyprus – And, It’s Gone!LOLFed

Cyprus Shows Trust in ECB Is MisplacedView / BB
Megan Greene: Markets have weathered potential crises in Italy and Spain with surprising calm, secure in the knowledge that the ECB will save the day if needed. This was always a false assumption, as events in
Cyprus have made clear.

The Euro Is Not Going Away: Deal With It, FolksEconoSpeak
The trick of imposing much of the short term cost on Russians suspected of being criminals or at least shady has just made it all that much easier.  Now, of course, there will almost certainly be a sharp decline in Cypriot GDP, just as in Greece and other victims.  But Cyprus will not leave, and the euro will continue.

FT column: Role of Cyprus in a German EuropeFT
Gideon Rachman: In the end, the Cypriots swallowed the bitter medicine. Facing national humiliation and a bleak future many complain their small nation has been forced to succumb to the will of a larger, merciless power – Germany.


The crisis in Cyprus not only threatens the Cypriot economy, but might also undermine the country’s relations with key partners and allieseuropp / LSE

EU audit on Cyprus money laundering - whitewash in the making?euobserver
EU-sponsored auditors have begun work in Cyprus. But their track record and the minimalist scope of the survey give cause for concern.

One-off or precedent?MacroScope / Reuters

Bailout Strains European TiesWSJ
Cyprus Deal Preserves Euro but Sows Mistrust Between Continent's Haves, Have-Nots

Cyprus Exit of the EuroGoogle Docs
and what happened on the 25Mar: both were very bad ideas (a presentation by Alexander Apostolides / European University Cyprus)

My take on Cyprus - a dangerous and risky gameTradingFloor
Michael Jarman: a complete abuse of trust and not what the European Union is supposed to represent.

Capital controls will put the euro at riskBruegel
The currency in Nicosia will no longer be worth the same as it is in any other country

Saving Cyprus Means Nobody Safe as Europe Breaks TabooBB

Cyprus banks remain closed to avert run on depositsReuters
Cypriot banks stay closed amid fears of bank runseuobserver

Investigators to charge those to blameCyprus Mail
The council of Ministers will appoint criminal investigators in the coming days with a “clear and wide-ranging mandate” to find those responsible for bringing Cyprus to the brink, President Nicos Anastasiades said last night.

Our view: Eurogroup deal designed to kill off Cyprus, not cure itCyprus Mail
We put ourselves in the position from which there was no escape but this did not justify the punitive nature of the bailout agreement imposed in the early hours of yesterday. The medicine administered by the Eurogroup, on the recommendation of the IMF and the ECB, is designed to finish off rather than cure the patient.

MORGAN STANLEY: Cyprus Is No Longer A Full Member Of The EurozoneBI

Cyprus and the law of unintended consequencesNordea
Cyprus might need more financial help or even a restructuring of public debt at some point * As taboos were broken, concerns of an eventual break-up of the Euro area are back on the table * Europe still lacks a coherent strategy on how to share the burden of adjustment and is still far away from overcoming the crisis, both economically and politically * Investors likely to remain cautious


Why Russia refused to bail out CyprusThe A-List / FT

Cyprus, SeriouslyKrugman / NYT
Desperate times call for desperate measures. Cyprus should leave the euro. Now.

Is Cyprus' Last Remaining Big Bank Set For An Unexpected Liquidation?ZH

Cypriots braced for harsh banking curbsThe Telegraph
Cypriots face draconian controls over how they spend their money, use debit cards or access their savings lasting beyond May as Cyprus tries to stop capital flight ahead of inflicting major losses on depositors at the island’s biggest bank.

Russian Withdrawals Quantified As Cyprus Central Bank Set To Expand Emergency Credit By Up To €3 BillionZH


Cyprus Capital Controls First in EU Could Last YearsBB
Cyprus is on the verge of an unprecedented financial experiment: imposing controls on money transfers in an economy that doesn’t have its own currency.

Cypriots braced for harsh banking curbsThe Telegraph
Cypriots face draconian controls over how they spend their money, use debit cards or access their savings lasting beyond May as Cyprus tries to stop capital flight ahead of inflicting major losses on depositors at the island’s biggest bank.

No signs of more bank withdrawals in euro zone: DijsselbloemReuters
The head of the euro zone group of finance ministers, Jeroen Dijsselbloem, said on Tuesday there were no apparent signs of increased withdrawals of savings within the euro zone.

Cyprus to shape future euro bank rescues: Eurogroup headReuters
A rescue program agreed for Cyprus will serve as a model for dealing with future euro zone banking crises and other countries will have to restructure their banking sectors, the head of the region's finance ministers said.

Bailout Insights: What Cyprus Tells Us about Germany's CharacterSpiegel
The Cypriot government was willing to do anything to save its banking industry. Yet Berlin, driven by a deep-seated fear of tax havens, sought the opposite. The resulting deal may have driven a stake through the heart of the euro-zone's much ballyhooed banking union.

EU lawmakers divided on compulsory bail-in for saverseuobserver
EU lawmakers are divided over whether large bank deposit holders should face compulsory levies if their bank hits serious difficulties.

Capital controls and the Cypri-outlier alphaville / FT

Cyprus fallout: over half of Germans doubt deposit guaranteeTrust Your Instincts

The Lesson From Cyprus: Europe Is Politically BankruptThe Automatic Earth
It seems to escape everbody, but that doesn't make it any less true: people from Portugal to Spain to Italy to Greece to Cyprus and Ireland are worse off today than they were when they first adopted the euro. Moreover, their economies are all getting worse as we speak and projected to plunge further… The only reason for Europe's Mediterranean nations to remain in the eurozone and the EU will be bullying from Brussels and Berlin. It's this bullying from the core, from those who preach union above all else, which will be the undoing of the entire project, but after a lot more pain of the same kind that now hit the Cypriots will have spread north (the rot won't stop).

It is not yet too late to drop the idea of capital controls in CyprusBruegel

The Cypriot bailout: A catalogue of farceOpen Europe

Cyprus: Alarms, But No SurprisesWSJ
Despite suggestions that the botched bailout in Cyprus was a total shock, in fact there were signals of what was coming

Save the rich!alphaville / FT
What makes the €100,000 sum so very special? And what are the consequences of creating such a divide?

C3--Cyprus Capital Controls--What to Look forMarc to Market
The purpose is to allow as smooth of a restructuring of the two largest banks in Cyprus. This means there will likely be continued limits on how much can be taken from bank accounts. In order to separate the insured depositors, who in Cyprus 2.0 will be left whole, and the uninsured depositors, the ability to move money between accounts will also likely be limited.  The important take away, though is that these are not the kind of capital controls that are meant to address the external deficit or impact cross border settlement as in the Target2 system. Only if capital controls venture into this area, will talk Cypriot euro make sense

I predict a (Cyp)riot!TradingFloor

A Furious Cyprus Begins Investigating Who Breached The Capital ControlsZH

Cyprus Capital Control Details RevealedZH


One Euro or Two?Marc to Market

Via Credit Suisse: A euro is not a euroZH

Cyprus - Who's to Blame - Brussels? The US Navy?Bruce Krasting / ZH

Why Won't Cyprus Obey Krugman?EconoSpeak
A lot of it of course is some sort of desire to "belong to Europe" and all that, which strongly influences both Greece and Cyprus, and continues to attract such possible joiners as Poland… While this devaluation might make it easier for Cyprus to recover several years down the road, that recovery would indeed be several years down the road, and in the meantime there would be a lot of pain

Moody's: Cyprus Euro Exit Risk SubstantialZH


Cyprus becomes first ever euro-country to impose cash controlseuobserver

Cyprus has finally killed myth that EMU is benignThe Telegraph
The punishment regime imposed on Cyprus is a trick against everybody involved in this squalid saga, against the Cypriot people and the German people, against savers and creditors. All are being deceived.

Cyprus bailout: a punishment not a solutioneuobserver
Whether Cyprus deserves its punishment or not, the people who run the eurozone should also be held accountable when they mess up.

Cyprus Banks Reopen Following Two Weeks Closure Under Armed Guard - Live WebcastsZH

Cyprus Tiptoes Toward New CurrencyWSJ
Are capital controls nudging Cyprus towards a new currency?

So Who Knew? In February Cyprus Deposit Outflows Soared To A Three Year HighZH

Cyprus calm as banks reopen under tight rulesReuters
Cypriots queued calmly at banks as they reopened under tight controls imposed on transactions to prevent a run on deposits after the government was forced to accept a stringent EU rescue package to avert bankruptcy.

Cyprus’s Banks Open After Two Weeks as Controls Curb PanicBB

Factbox: Cyprus imposes capital controlsReuters
Cypriot banks reopen with tight controls imposed on transactions to prevent a run on deposits after the government was forced to accept a stringent EU rescue package to prevent the country from going bankrupt.

Cyprus Reopens for Business: Now What?Macro and Markets / CFR
In sum, compared to the initial proposal that taxed insured deposits while leaving more junior creditors untouched, the final deal gets the creditor prioritization right, hits uninsured deposits at the two top banks hard while leaving insured depositors untouched, and gives the government broad powers to restructure banks and impose capital controls…Still, the contagion to investors elsewhere is likely to be significant.

Meanwhile, At Cyprus Airport...ZH

Cyprus - The Answer Is UniastrumMark Grant / ZH


Europe’s democratic deficit evident in Cyprus bailout arrangementReuters / MacroScope

The capital controls in Cyprus and the Icelandic
Cyprus has imposed temporary capital controls. This column sheds light on how temporary and how damaging they are likely to be, based on Iceland’s experience. The longer controls exist, the harder they are to abolish. Icelandic capital controls, which have been ‘temporary’ for half a decade, deeply damage the economy by discouraging investment.

Is The Collapse Of Cyprus Due To This Man?ZH
Laiki Bank's chief risk officer Dimitris Spanodimos represents the tip of the spear of mass delusion that encompasses most (if not all) of Europe.

What happened in CyprusFree exchange / The Economist

Cypriot banks re-open without paniceuobserver

The Definitive Cyprus Bailout InfographicZH

With Cyprus, Europe risks being too tough on banking moral hazardBruegel
Europe has long been far too tolerant of moral hazard in its banking system. But with the Cyprus plan, the pendulum may now be swinging too far in the opposite direction.

Should Cyprus drop the euro? Here's what they have to gain--and loseWonkblog / WP

Could Cyprus go the way of Ecuador?Felix Salmon / Reuters

Did Cyprus Set a Dangerous Precedent? Some Further ThoughtsPIIE

Cyprus crisis: limits on bank withdrawals to last 'about a month'The Guardian
Just 24 hours ago Cypriots were told curbs to prevent money from leaving the country would only be in place for a week

What happened in CyprusFree exchange / The Economist
An interview with Athanasios Orphanides

Oooops... ZH
After reading this memo from the Central Bank of Cyprus sent to bank CEOs on February 11, arguably to put them at ease, all we can say is "Oooops"...

Big depositors in Cyprus to lose far more than fearedReuters
Big depositors in Cyprus's largest bank stand to lose far more than initially feared under a EU rescue package to save the island from bankruptcy, a source with direct knowledge of the terms said on Friday.

Investors wary of "slow panic" on growth after Cyprus rescueReuters
World markets have reacted calmly to the twists and turns of Cyprus's financial rescue in the last fortnight but many investors fear the economic fallout is yet to come.

In Cyprus, the bank run that wasn'tReuters
In the end it was hardly even a stroll, let alone the widely predicted run on the banks of Cyprus.

Cyprus controls an “omnishambles”Hugo Dixon / Reuters
The lesson of capital controls elsewhere is that, once they are imposed, they are hard to remove. Iceland’s curbs are still in place five years after they started. In Argentina, they lasted a year.

The Cyprus bail-out: This septic isleThe Economist

The future of Cyprus: A troubled island storyThe Economist

The Cypriot deal: Second time unluckyThe Economist


Bank of Cyprus’s Customers May Lose as Much as 60% on DepositsBB
Customers will have 37.5 percent of their deposits above this amount converted into shares with full voting rights and access to any future Bank of Cyprus dividend, the Nicosia-based central bank said in an e-mailed statement. A further 22.5 percent will be temporarily withheld to ensure the lender meets the terms of its recapitalization, as agreed under Cyprus’s loan agreement with international creditors, the central bank said.

25 Lessons From The Cyprus 'Deal' ZH

Trade Prospects for CyprusEconoSpeak


Political Fallout Begins: Former Cyprus President Named In Loan Write-Offs Leading To Banking InsolvencyZH

Cyprus Parliament President Says "No Future" Under Troika, Calls For "Iceland" SolutionZH

Cyprus President's Family Transferred Tens Of Millions To London Days Before Deposit HaircutsZH

The Seven Broken Taboos Of The Cyprus DealZH

Cyprus Has Finally Killed Myth That EMU Is BenignJohn Mauldin / The Big Picture

Pop Quiz: How Big Is the Bailout Of Cyprus?

A failure of compassionCoppola Comment
None of this is true. There is no justice in the Cyprus deal. Everyone in Cyprus, and many people in other countries, will pay - for what is in fact a sovereign bailout.

Cyprus bets on casinos to help boost economy after savings raidThe Guardian
President braves wrath of Orthodox church by including plan to lift ban on gambling among his initiatives to rescue economy


List Released With 132 Names Who Pulled Cyprus Deposits Ahead Of "Confiscation Day"ZH

For Cyprus, The Pain Is Only Just StartingZH

Today, a draft of the revised Cypriot MOU being prepared by the head of the IMF mission to the island nation, Delia Velculescu, leaked and can be found in its 24 page entirety here.

Cyprus Seeks More Time to Meet Targets in Talks With TroikaBB


Cypriot deal is welcome change to EU approacheuobserver

Despite its dangers, the EU's new bail-in model will make it easier to deal with potential problems in Italy or France and reduce moral hazard.

Bailout paper gives Cyprus four years to balance budgeteuobserver

The 24-page Memorandum of Understanding (MoU) published in Cypriot press on Monday (1 April) sets out a detailed programme of reforms including tax rises, spending cuts, privatisation of state assets and healthcare and pension reforms.

Cyprus Finance Minister ResignsZH

Cypriot Finance Minister Michalis Sarris ResignsTIME

Cyprus finance minister quits, capital controls partly eased Reuters

Cypriot Finance Minister Michael Sarris quit on Tuesday after concluding talks with foreign lenders on a bailout that forced the island to slap unprecedented losses on bank depositors in return for aid.


Cypriot finance minister resigns as inquest into crisis beginseuobserver

Life after the Fall: The Aftermath of the Cypriot Banking CollapseSpiegel

Cypriots are paying a high price for the collapse of their banking system. A leading lawyer, a real estate broker and a bar owner have already begun the process of searching for a future -- for themselves, their companies and their country.

Cyprus Finance Minister Sarris Quits After Brokering RescueBB

Cypriot Finance Minister Michael Sarris quit amid a probe into the island nation’s economic crisis, leaving the government eight days after helping it clinch an international bailout to stave off financial collapse.


A turbulent Easter in CyprusOpen Europe

IMF Reaches Staff-Level Agreement on a €1 Billion Extended Fund Facility ArrangementIMF

Cyprus faces an economic catastrophe even worse than that inflicted on Greeceqfinance

In defence of CyprusCyprus Mail

Did Putin Sink Cyprus?NYT

Europe, it turns out, is studded with vulnerable, contagious tax islands, and their availability only compounds Russia’s deeper problem: it is both too corrupt and too paranoid to keep its billions at home.

Cyprus finance minister resignsThe Telegraph
Embattled Cypriot finance minister Michalis Sarris quit immediately after talks to iron out details of the island's €10bn bail-out concluded on Tuesday, having spent just five weeks in office.


Statement on Cyprus IMF

by Olli Rehn and Christine Lagarde

The Cyprus crisis has shown the growing dysfunctionality of the eurozoneEuropp / LSE

Guest post: Cyprus, when EMU broke and trust was underminedalphaville / FT

The ‘Cypriot precedent’ and experiment with capital controls, a first for the eurozone, are still reverberating around the EU. Gilles Thieffry, a Partner at GTLaw, Geneva, writes on possible legal implications.

Cyprus and the financing of banks Coppola Comment

Cyprus Turks Share Pain as Banking Crisis Revives Talk of UnityBB


Cyprus: Hope Trumps Reality CFR

Numbness gives way to anger in Cyprus over bailout Reuters

Public shock in Cyprus about the tough terms of an international bailout is turning into anger as millions of euros remain locked in the country's banks.

Eric Sprott's April Commentary: Caveat Depositor market folly

Eric Sprott of Sprott Asset Management is out with his April commentary entitled, "Caveat Depositor."  In it, he delves into the Cyprus situation and the macro effects moving forward.

Cyprus bailout: What are individual EU member states on the hook for? Open Europe

Where will Cypriot growth come from? Open Europe


Key documents missing from Bank of Cyprus records Irish Times
Former chief executive had ‘wiping software’ on his computer, investigation reveals

NEW: Leaked reports on why Cypriot banks sought state helpCyprus Mail

Cyprus, where the vicious circle stopped alphaville / FT
In continental Europe, we are witnessing the rather extreme outcome that results from having the provision of liquidity divorced from an ability to regulate banks…

'Abject Error': How the Cyprus Deal Hurts EU Strategic Interests Spiegel
The euro-zone bailout of Cyprus exposed deep divides within Europe and also brought back the specter of the euro crisis. In addition to harming the island nation's economy, errors made in negotiating the deal will ultimately be a setback to strategic EU interests as well.


Cyprus Can Save Itself by Fleeing the EuroView / BB

Cyprus Losses Spur EU Lawmakers to Bolster Depositor ProtectionBB

The European Parliament will seek greater protection for depositors of crisis-hit banks in the wake of the Cyprus bailout as it weighs changes to proposals aimed at taking taxpayers off the hook for future rescues.

Of political power and dual-currencies in Cyprus alphaville / FT

Some post-Cyprus thoughts from Citi’s Buiter et al… first on rolling capital controls and the chances of a new Cypriot pound being forced into existence (full paper)
Why Cyprus must leave the euroFelix Salmon / Reuters

Cyprus Suspends Probe Into Who Withdrew Money EarlyZH

Here We Go: Cyprus To Sell €400 Million In Gold, About 75% Of Its Total Holdings, To Finance Part Of Its BailoutZH

Cyprus: Oddities in leaked bailout documentsBrussels blog / FT


The eurozone’s second sovereign restructuring?alphaville / FT

Our colleagues at FT Brussels Blog got their hands on the draft debt sustainability analysis for the Cyprus bailout and bail-in — click for the full doc.

Cyprus: Not Done Yet CFR

More leaked Cyprus documents: first tranche €3bnBrussels blog / FT

EMU plot curdles as creditors seize Cyprus gold reservesThe Telegraph
Mario Draghi Orders Cyprus To Sell Gold To Cover Bailout "Shortfall"ZH

Draghi Says Any Cyprus Gold Sale Must Cover Emergency-Loan LossBB

Eurogroup Statement on CyprusConsilium Europa (pdf)

The Gloriously Ballooning Bailout Bedlam Of CyprusTestosterone Pit

Ten billion euros for Cyprus bailout non-negotiable, Germany saysReuters
The EU and IMF's 10 billion euro contribution to the bailout for Cyprus is non-negotiable, the German government said on Friday.

The controversial rescue of Cyprus moved a step closer to reality today as the Eurogroup of finance ministers said that the European Stability Mechanism (ESM), the euro area’s rescue fund, should give the go-ahead to financial assistance worth €9 billion ($11.8 billion) by April 24th.

Euro ministers back 10 billion euro Cyprus bailoutReuters
Euro zone finance ministers backed a 10 billion euro bailout for Cyprus on Friday and the European Commission said it would try to help the island's economy grow again with better use of EU structural funds.

Ministers finalise €10 billion Cyprus bailouteuobserver

Bailout Bargaining: Cypriot Shortfall Irks German ConservativesSpiegel
Euro-zone finance ministers are set to agree on a bailout package for Cyprus on Friday, but news this week that the country will need to raise an additional 5.5 billion euros has raised new questions. Germany's parliament is likely to approve the aid, but many are calling for conditions to be imposed.
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