Budawang

Very good point. It's an outrage against capitalism that bond holders have got off scot free and depositors are being made to pay. The banking system is based on trust so what's happened in Cyprus is lunacy.

Fredbargate

OK this clip is in Spanish, but the pictures are international

http://www.cajamicolchon.com/

downunderpom

Barn, horse, door, bolted.....

This from Reuters:

"While ordinary Cypriots queued at ATM machines to withdraw a few hundred euros as credit card transactions stopped, other depositors used an array of techniques to access their money.

No one knows exactly how much money has left Cyprus' banks, or where it has gone. The two banks at the centre of the crisis - Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus - have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia's Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks' largest depositors."

Branches in London, none of which closed or restricted withdrawals... who'd a' thunk it? So for once it's the bankers who hear "...aaand it's gone!"

downunderpom

Reports coming in:

"An explosion has occurred outside of a Bank of Cyprus branch in Limassol, according to sources enikos.gr and SigmaLive. The blast was caused by an "improvised explosive device," according to an English translation of the SigmaLive report."

BE readers in Cyprus - keep your heads down. Watch where you are walking.

Tranmere Rover

I confess I haven't read the thread (away on business for a few days, hone, knackered......you know the drill) but Cyprus is a whole different set of parameters to NZ. They took bailout money, then ignored the T&Cs. Their banking system is based on off-shore deposits from (in some cases, maybe most even) from depositors of questionable repute. As a result, the EU puts pressure on the banks who make money by being "safe havens" by making them pay up. In this way, pressure mounts on the depositors. Of course, seveal billion dollars has left Cyprus since so much notice was given.....

Charismatic

I'm surprised at other peoples surprise in a way.

Capitalism is inherently unstable and constantly reinventing itself, always has been so. Every economist from the ultra-liberal capitalist Hayek, to socialists Keynes to communist Marx would agree.

Think about capitalism currently with the large disparities in wealth between classes, relentless drive to grow debt at a high rate than incomes using low interest rates, quantitative easing to devalue wages, centrally controlled currencies, markets constricted by artificial constructs, a nearly endless global low-cost workforce, very limited coordination between states on economic issues and low tax rates left open for offshore operators. It was never designed to be stable or sustainable in the long-term.

Right now it's the low rates/low wages asset bubble crisis, the late 2000's it was the banking and sub prime lending crisis, in the early 2000's the .com crash, in the late 90's the Russian and Asian financial crisis, early 90's market crash, late 80's savings and loan crisis, mid 80's Japanese asset bubble, secondary banking crisis of the 70's etc.

Don't go crying because the system is failing, it's lurched between failures, bailouts and market interventions for a hundred years or so. Mostly what capitalism has shown is the depth in our ignorance in trying to make it work, a litany of failed ideas. No fix is permanent.