The Next Phase of the Financial Meltdown in Cyprus: an "Unimaginable" and Vicious Policy is Being Considered

March 25, 2013

(Director Blue) - The editor-in-chief of the Greek newspaper Ekathimerini asserts that an "unimaginable" solution is on the table.

The main question surrounds the future of the island’s largest lender, Bank of Cyprus. If unsecured deposits (above 100,000 euros) at all Cypriot banks are taxed then large savings at Bank of Cyprus are likely to be taxed between 20 and 25 percent. If the levy is not imposed on deposits at other lenders, the haircut for Bank of Cyprus customers will be much larger.

The option of a full bail in of Bank of Cyprus depositors is still on the table. As with the Popular Bank of Cyprus (Laiki), which is to go through a resolution process, the full bail in option could lead to deposits above 100,000 euros being lost. The only compensation for unsecured depositors will be shares in the “good” bank that will be created by a possible merger between the "healthy" Laiki and Bank of Cyprus entities.
Just a week ago the entire financial world shuddered when Cypriot banks were to "tax" (i.e., steal) 12 to 15 percent of deposits.

Now the act of total confiscation of these accounts is on the table.

This is lawlessness. And Statist cheerleaders like Henry Blodget and Paul Krugman support the policies that will bring Cyprus to our shores.