zygiman

The supermarket shelves were getting empty for a couple of days, but that was due to panic buying. The supermarkets shelves have been pretty full most of the time, with only some small delays with the release of goods at the docks at the start of the problems. Once payments were assured, or agreements were being kept, it was back to normal.

There are also many small supermarkets and kiosks that people could use apart from the main supermarkets.

Getting approval for transactions was very fast, in one or two days.

A couple of problems we had to bear in mind.

There was a very big problem with businesses demanding cash only for goods, as cheques were not accepted, and credit and debit card payments were not being processed.

The other problem i wish to mention is that businesses held too much cash either on their premises or at home. The banks were closed for 10 days, so no takings could be deposited. A business is insured for an agreed amount of cash for a policy. The busnesses far exceeded this amount, so if anything disatrous happened, and they lost the money, they were not insured for anything above that amount. Those that took their takings home, were taking a very large risk too.

zygiman

Bank Of Cyprus converts 37.5% of deposits over €100,000 into Class A Shares and retains another 22.5% as a buffer for possible conversion into shares at a later date.

zygiman

Vote in the Cyprus Parliament today on whether to pass the Memorandum Of Understanding agreement.

thistlehollyberry

This question may have been answered before so please forgive me if it has. I know that people who had over E100,000 in the bank lost part of their savings but what happened to people who had significant holdings in the stock market?

zygiman

Cyprus government votes in favour of bailout deal.

zygiman

Cyprus money laundering investigation reports completed. Allegations of money laundering not confirmed.

Dick Dasterdly

So did non resident accounts get the same haircut as resident accounts ?

Veronica-K

Yes, it made no difference whether you live in Cyprus or not, if you had large amounts of money in the Laiki or Bank of cyprus it was hit.
In fact it is believed there was a large amount of Russian laundered money in banks here so that is now gone.

Actually we were talking to Laiki bank employee yesterday who told us that there are now plans that properties which are seized by the banks for non payments of mortgages etc will be offered to those whose money has been frozen. If this happens it will mean that those young Cypriots who have been saving to buy their own homes and lost money in the haircut will be able to have their homes. Also it is thought that others will take the opportunity to aquire properties to rent out in this way to give them an income. It will be interesting to see what happens.

Dick Dasterdly

Providing of course that they don't apply the same draconian renting restrictions and taxes as are now being applied in Spain.

zygiman

A provisional IPT, Immovable Property Tax, Bill has just been passed by the House Of representatives to appease the Troika. It is a make do Bill, as the values of Properties are based on 1980 values, but this will change over the next two years to bring these prices more in line with today's prices.

Rent increases have been frozen for two years, whereas before, a landlord could increase the rent by a maximum of 14% after two years.

We learn of new things each day!

zygiman

Cyprus exempts four foreign credit institutions from capital restrictions

Cyprus Ministry of Finance issued Friday a second decree, exempting four credit institutions operating in Cyprus from the capital restrictions imposed on Cypriot banks.

These institutions are BLOM Bank SAL, Lebanon and Gulf Bank SAL, OJSC Promsvyazbank which operate as branches in Cyprus and the VTB`s subsidiary Russian Commercial Bank (Cyprus) Ltd.

All cashless payments or transfers of deposits/funds from a domestic customer to an international customer of a credit institution included in the catalogue or to such a credit institution’s own account are considered as cashless payments or transfers of deposits/funds to accounts held abroad and are subject to the provisions of any other Decree issued under the Law

britishbull

surely the shareholdings in the banks should have been cancelled and then turned over to the depositors who had their cash converted into shares as without this the shares would be worthless?

Gordon Barlow

Well, I think this was pretty much the intention, Bull. Just last week I blogged about the danger that the Cyprus action was one of three major precedents for the bailing-out of insolvent banks worldwide ["Unsafe custody"]. The problem arises out of stupid and/or reckless investments made by bankers in obscure derivatives that they knew nothing about but seemed to be a good idea at the time. Being "Cyprus'd" is a fate that awaits many more bank customers with credit balances around the world, I fear. A year or two from now, we may look back on the Cyprus event as being a dry run, by the European Central Bank.

What does The Team think?

zygiman

Banks should be split into investment banks, where people may deposit their savings knowing the banks will gamble their money, like the Cyprus banks with Greek debt, and normal banks, where people deposit their savings for a % interest return. The banks will then give loans to businesses & mortgages etc, with strict screening controls in place.

The shares the savers in the Cyprus banks are being offered will only be valuable if and when the Bank Of Cyprus will return to profitability. The chance of a return to profitability is also weighed down by the possibility of having to absorb the former Laiki Bank employees, leading to a massive wage bill. Property loans, the NPL's, Non Performing Loans, which the Cyprus banks did not disclose as NPL's, but which the Eurogroup now does insist that they are, will be a millstone around any chance the Bank Of Cyprus will ever return to profitability.

Bottom line is, look for other places to place your savings. Cyprus was a template, handled in an appalling way, but acceptable collateral damage by Germany.

Exchange of bank information is leading Luxembourg and Austria to toe the line in diclosing bank account information. Switzerland, Jersey, Guernsey have all followed suit.

Gordon, i feel that it is only a matter of time before the Cayman Islands will be forced to hand over information too. Tell your people their to make arrangements before disclosure is forced upon the Cayman Islands.

Gordon Barlow

Actually, Cayman is doing quite a good job in fending off excessive disclosure - mainly because we have a lot of heavy hitters who use our facilities. It's generally presumed that many Western politicians receive their bribes in Cayman, paid by the Cayman subsidiaries of the corporate bribe-payers. Sad but true.

What is more dangerous to us (and everybody else in the world!) is the apparently well organised program of a) theft of customers' balances by hitherto reputable banks, and b) confiscation of customers' assets held in segregated accounts.

I've just posted some relevant comments on my blog ("Unsafe custody") which give an overview of my concerns.