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Cyrpus Depositors Face 60% Loses

Via McClatcy:
Depositors in Cyprus with savings of more than 100,000 euros ($128,000) could face losses of up to 60 percent, under tough conditions attached to an international bailout, Finance Minister Michalis Sarris said Saturday. The deal would force large depositors at the country’s two largest lenders – Bank of Cyprus and Laiki – to take heavy losses, while smaller deposits would be guaranteed. A mandatory one-off tax on deposits of more than 100,000 euros in return for shares in Bank of Cyprus would bring a 37.5 percent decrease in value. Depositors could also lose an additional 22.5 percent, Sarris told RIK state television, if it is determined that more funds are needed to save the bank. The small eurozone member avoided a financial meltdown this past week by sealing a 10 billion-euro bailout from the European Union and the International Monetary Fund. . .

Hey, anyone who thought investing in a bank in an amount greater than that which was guaranteed -- especially in a tiny nation such as Cyprus -- should have known better. Speculating on bank interest rates is the same as speculating on any other investment and those who speculate should never be bailed out. - Greg Pollowitz


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