News update 23/03/2013
Καλημέρα σε όλους,
Waking up from a nightmare … It’s a weekend to let the impact settle in, take stock of the situation, gather hope and move forward.
Remaining in the Eurozone allows us to have hope. This was a major achievement.
A very brief selection of articles for this morning:
Cyprus Approves Capital Controls as EU Ministers Prepare to Meet
President Nicos Anastasiades is trying to end a week-long impasse that is starting to threaten the country’s membership in the euro. The European Central Bank has imposed a March 25 deadline on Cyprus to come up with proposals that will satisfy international creditors or face the risk of losing access to all emergency funds.
Cyprus bailout deal closer after MPs vote for bank shake-up
Tough love from the Head of the LEX column in the Financial Times - ** MUST READ **
It may be best to recognise this and go for an even more severe restructuring of the banking sector. At the minimum, Bank of Cyprus, the country's largest lender, would need to be resolved along with CPB.
The Cypriot MPs won't like any of this. But what is the alternative? Endless capital controls? Printing a parallel currency so people get Cypriot Pounds instead of euros from the cash machines? Or quitting the euro entirely?
There are no good options. But the longer it takes for Cyprus to get real, the greater the damage.
A Cypriot Nobelist Is 'Appalled' by the Proposed Bailout Bank Tax
What capital controls mean
This summary was circulating on the internet yesterday, before the vote. Of particular interest is the final point:
· Restrictions in daily withdrawals
· Ban on premature termination of time savings deposits
· Compulsory renewal of all time savings deposits upon maturity
· Conversion of current accounts to time deposits
· Ban or restrictions on non cash transactions
· Restrictions on use of debit, credit or prepaid debit cards
· Ban or restriction on cashing in checks
· Restrictions on domestic interbank transfers or transfers within the same bank
· Restrictions on the interactions/transactions of the public with credit institutions
· Restrictions on movements of capital, payments, transfers
· Any other measure which the Finance Minister or the Governor of Cyprus Central Bank see necessary for reasons of public order and safety
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