Top EU official: Cyprus bank rescue new template
Source: AP-Excite
By JUERGEN BAETZ
BRUSSELS (AP) - Inflicting losses on banks' shareholders, bondholders and even large depositors should become the 17-country eurozone's default approach for dealing with ailing lenders, a top European official said Monday.
Banks' owners and investors must be held responsible "before looking at public money or any other instrument coming from the public side," said Jeroen Dijsselbloem, who chairs the Eurogroup gatherings of the 17 eurozone finance ministers.
The eurozone countries and the International Monetary Fund earlier Monday granted Cyprus a 10 billion euro ($13 billion) bailout that foresees dissolving the country's second-largest bank, wiping out its bondholders and inflicting significant losses - possibly up to 40 percent - on all deposits larger than 100,000 euros ($130,000).
EU officials have previously stressed that this measure, a so-called bail-in, was a "unique step" in Cyprus. That's because of the size of country's banking sector - almost eight times the economy's annual output - and the capital structure of its lenders, which rely almost exclusively on deposits instead of bonds.
FULL story at link.
Read more: http://apnews.excite.com/article/20130325/DA589EL83.html
Dutch Finance Minister and chief of the eurogroup Jeroen Dijsselbloeman chairs an emergency eurogroup meeting in Brussels on Sunday, March 24, 2013. After failing for a week to find a solution at home to a crisis that could force it into bankruptcy, Cypriot politicians were turning to the European Union on Sunday in a last-ditch effort to help the island nation forge a viable plan to secure an international bailout. (AP Photo/Geert Vanden Wijngaert)
BB1
(798 posts)If this is really a template, then next week all investors will be gone from Europe.
dipsydoodle
(42,239 posts)Prior to that his comment had been clarified :
4.51pm GMT - which is 11.51 (ET)
The backtracking begins, with Dijsselbloem's spokesperson confirming the quotes are accurate, but the suggestion Cyprus is a template is apparently taken out of context.
http://www.guardian.co.uk/business/2013/mar/25/eurozone-crisis-cyprus-bailout-deal-agreed
I wouldn't bother searching back for that - too many subsequent update which are running even now.
Main update link is here now : http://www.guardian.co.uk/business/2013/mar/26/eurozone-crisis-cyprus-banks