Cyprus

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Today’s breakdown of the Sunday papers: China RMB debate: The renminbi’s road to full internationalization http://www.euromoney.com/Article/3229831/China-RMB-debate-The-renminbis-road-to-full-internationalization.html The chief executive of Wonga has defended the payday lender by claiming it is “a powerful force for good in the financial world.” http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10206825/Wonga-is-a-force-for-good-f…

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Trading yesterday in the UK had little macro news to drive markets, with the media focusing on the passing on first female Prime Minister of the UK. Thatcher was a controversial character, who in the City of London is usually revered and hailed for reviving the UK economy, but her policies were not without critics, especially from those who lived in communities with an industrial/mining focus. The media is awash with opinion pieces from all parts of the political spectrum, but there is…

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Cypriot capital controls are weighing on markets this morning. The draconian measures have been put in place, to slow the pending bank run, as investors attempt to pull assets from the crippled Cypriot financial system. Individual accounts with balances below €100,000 will be “unaffected” by the haircut, however with large balances expected to receive significant haircuts, funds are expected to exit the country. The mood is reported to be hostile in Cyprus, as residents feel…

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Cypriot capital controls will be in place for 7 days, starting Thursday and apply to all accounts irrespective of currency or if the bank is part of the bailout agreements: Suspension of cashing cheques, allow check deposits All card transactions are capped at €5,000 per person, per month A ban has been imposed on leaving the country with more than €3,000 per person Interestingly an exception is for student tuition payments, though these are payments which h…

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Dijsselbloem, the Chair of the Eurogroup set the markets into free-fall, after stating that the Cypriot bailout was a “template for other Euro-area bailouts.” This comment of the Cypriot agreement being a precedent for future bailouts sent European bank shares crashing. However over the last 48 hours, hindsight has led to considerable backtracking by EU officials that in fact the Cypriot programme isn’t a template (Bloomberg). The losses the haircut on deposits could…

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The chair of the Eurogroup meetings, Jeroen Dijsselbloem, spooked markets with comments that the last-minute bailout of Cyprus set a precedent for any future interventions. The so-called bail-in of individual savers has been met my disbelief of many, after the move that was supposed to help Cyprus, send shockwaves through Europe. The unprecedented move led many to quickly draw parallels between Cyprus and other EU countries (PIGS), though EU official’s continuously stated that Cyprus w…

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The situation continues to develop as comments from EU officials and Cypriot politicians fuel market speculation. Sources for many rumours are unclear leading to speculation and confusion as to what the current situation is. The banks remain closed in Cyprus and the final terms (not yet known) are still required to be ratified by a Cypriot government. The Cypriot coalition has only recently taken office and the required majority for a vote might not be met. Market chatter has beg…

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Today’s trading has been fuelled by speculation, rumour with only brief new detaisl. It is clear that the initial announcement on Saturday caught many investors off-guard, however little clarity has emerged since then. As currently stands Cypriot banks will be closed tomorrow (Tuesday) and potentially remain closed on Wednesday and Thursday. The parliamentary vote to ratify the bank deposit haircut has been postponed, to give politician’s time to renegotiate the EU Deal.…

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To the surprise of analysts it was announced over the weekend that as part of the bailout agreement, Cypriot bank deposits would be imposed with a levy, or a so-called tax. The bailout terms are harsh in comparison to many, with the unprecedented terms effecting individual investors directly. The situation is fluid, and the initial terms of the “tax” are rumoured to have changed, with government officials in discussion on how to move forward. Today and tomorrow are now bank holid…

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