The Worst Case For Big Depositors In Cyprus: 15.26% Haircut

Tyler Durden's picture

The first proposed haircut on Cypriot deposits, which saw deposits under €100,000 haircut by 6.75%, and those €100,000 and larger (i.e., the "Russian oligarch" pool) trimmed by 9.9% appears to be hours away from renegotiation. The reason is that Europe now is convinced the only reason the bailout proposal would not pass parliament is that the tax on the "common man" deposits is too high, which means it will be revised to 3% or perhaps lower, with the possibility of staggered thresholds, such that deposits under €20,000 remain untouched. This will be decided at a conference call at 6:30 pm GMT when Europe will once again confirm its cluelessness, and inability to make concrete, firm decisions. While none of this will restore confidence in the Cypriot and European banking system, the open question is what will be the Russian impairment - i.e., what is the most that whale deposits can be cut by? We now know the answer, courtesy of this interactive widget from Reuters, which allows one to calculate what the haircut on large deposits would be assuming an X% haircut on smaller deposits. It appears that the worst case for Russians will be 15.26% - this is how much of all Cypriot deposits €100K and higher would be taxed by if there is 0% tax on the small deposits.

Readers are welcome to play with their own assumptions of what is considered "fair" for deposit confiscation in a global socialist regime, below:

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Seasmoke's picture

Canary (in the coal mine) Island.

TruthInSunshine's picture

The European Union; one of the most ill-conceived & worst-implemented ideas in the 21 century, and that's saying something...

Pladizow's picture

The answer to the % deposit haircut lies in the % of Russian oil Cyprus relies upon!

toys for tits's picture

Will they now be changing the name of the Columbian necktie to give it some Russian flavor?

Manthong's picture

Looks like it’s going to be on like Donkey Kong with the Rooskies..

The Juggernaut's picture

NWO One World Government... mmmwwaaahahahahaaaaaaa!  Only 70 Euro's for a ticket?  I should go to this shit.

SmittyinLA's picture

Nope, all ZH members are accredited members of the media

"Media members: free access with accreditation"

toys for tits's picture


How's this for a title:


"Under the High Patronage of His Serene Highness Prince Albert II of Monaco"

smlbizman's picture

isnt worth it if saves just 1 banker.....

fonestar's picture

What is it about yuppies, baby boomers and other garden variety of sheeple that love getting a$$ raped so much?

You keep your funds in a western banking institution and you deserve what you get!

hapless's picture

it will be revised to 3% or perhaps lower, with the possibility of staggered thresholds, such that deposits under €20,000 remain untouched

Shit.  I was hoping the "common man" was about to get his well deserved wake-up bitch slap.

nonclaim's picture

Must be very amusing to wait and see how much foreign people will agree to take from your bank account...

hapless's picture

You will find out soon enough.

GolfHatesMe's picture

They must be reviewing Minimum S&P or Dow purchases.  Now take your money out of the bank, and buy the S&P, or Autozone

partimer1's picture

If this is really between the Russian money and the EU, then this is far from over.  Do you all think the Russians will give 10% to EU for nothing?  what are those nuclear war heads for? 

TheGardener's picture

Too clever by half I would say on those Russians.

They wanted a stable jurisdiction for their holding companies and monies and that island with common law
traditions seemed to provide just that. An added bonus ,
they were told, is this is even safer because of EU membership! Well , wrong , welcome back to the EUdSSR !

BlueStreet's picture

Problem the miners are so oblivious they think the canary is just sleeping.  It'll wake up, just wait.  



trollin4sukrz's picture

My niece works at a large banking institution and they are told by their higher ups that whan we the people put our money in their bank, the money then belongs to the banking firm. She has told many customers this inside the bank and they seem to take it all instride. WTF is wrong with this pic? My wife was speechless when she told us, but I had been trying to explain fractional banking to her for years. NOW she is finally starting to see the light.. baa baa bitchez...

Chupacabra-322's picture

Do you not remember the article 5 days ago about the CIA and FBI spying on all USA citizens bank accounts???

They are calculating how much money the USA will earn with this new “tax”. Plus, they will be able to retroactive the “tax” based upon account balances as of 1/1/2013.

This is coming to Amerika and they know exactly how much to “tax” you already!

Shit!  I go surfice it to say, that the Global Criminal (Intelligence/Bankster) Crime Sydicates have already had thier noses in The American Peoples Private Accounts. 

They're about to "John Corzine" MF Global the whole world. 

The Heart's picture

Wa-tanga Chupa!

You hit the nail on the head.

Why anyone thinks their finances are safe from govt intrusion and records stealing is just something to always wonder about.

Prolly been watching peoples transactions for everything everywhere in the world for the last ten years. Maybe more.

Is that 50% banking haircut raid coming to a theater near you soon?

"Officials are billing the Cypriot hit on savers as a “fiscal measure” rather than a bail-in, haircut or loss inflicted on depositors in order to wriggle around the EU deposit guarantee law."

xtop23's picture

As I stated in a post yesterday, the class warfare card wins every time. Carpe Diem 51%'rs. 

LeisureSmith's picture

The Canaries keep piling up, but some people seem to think they are just resting their eyes.

Joe Davola's picture

See there, you'll thank them for saving you 4% and sticking it to the other guy.

Until they come back for more in a few months.

Matt's picture

Deposits under 100,000 Euros are insured by the State (Cyprus). If any fee was to be levied on those amounts, it should come from the State, whether they have to borrow it or whatever.

If someone has an account with 120,000 Euros in it, the first 100,000 should be immune to any confiscation, and only the extra 20,000 should have the fee levied. And that should be PER BANK, as promised.

If the government of Cyprus cannot raise the money to cover the first 100,000 Euros in an account, they should sell assets (i.e. grant Gazprom the Oil and Gas Exploration Rights, or preferably auction those rights off in an open process that allows other bidders, to insure the best price is received).

Anything less, and the people should rightfully withdraw all of their money from the banking system there. Any shortfalls should be taken from the bank, the bank management, the banks owners, the bank creditors, in that order.

PUD's picture

Robin Hood syndrome. All the peasants will be so happy they were only robbed a little.

Tirpitz's picture

After all it's for a good cause: the bond holders are spared any losses.

Balvan's picture

Better honest cut than inflation. At least they will know exactly how much was stolen from them.

Matt's picture

So, you believe there is zero inflation in the Eurozone? This is not A or B, this is A plus B.

Desert Irish's picture

Russians can't vote in Cypriot elections so you can guess which way this is heading


Sorry Vlad, bend over ...

Joe Davola's picture

Aren't our Supremes deciding whether you have to be a citizen to vote in elections?  These national borders/citizenship concepts are for the unenlightened racists.

Id fight Gandhi's picture

Seems like US markets are shrugging it off. Of course..

Sandy15's picture

That's because Benny is at the printing press right now, also the PPT kicked in too, buying the market up and pushing silver and gold down

StychoKiller's picture

"Suddenly, millions of depositors cried out in terror and were silenced."

machineh's picture

First tranche 15.26%.

Leaving a second tranche of 24.74% to meet the already announced target of 40%.

Stability ain't stable.

Coke and Hookers's picture

This whole situation is like a wet dream for the elite. They can fuck the two groups of people they hate the most at the same time; middle/working class folks with savings and the Russians.

LawsofPhysics's picture

"This whole situation is like a wet dream for the elite in the western world" - FIXED.  What, you really think there are not any "elite" in Russia or the eastern world?  LMFAO!!!

Coke and Hookers's picture

Western banker elite is what I meant but thanks for your enthusiastic clarification.

LawsofPhysics's picture

The world has been here before, hedge accordingly.

Coke and Hookers's picture

Interestingly, since we're talking about the Russian elite, it's actually split in two. Part of it has allied itself with the western banker elite and banks in London and the Caribbean. The Russian elite loyal to Mother Russia banks in Cyprus. It's not clear cut like that but that's the general rule is seems.

Turin Turambar's picture

This could be a teachable moment.  Maybe the Russian mob will teach people how to deal with banksters and unscrupulous politicians who steal (from them).

mckee's picture

Ha... worse case is about 84.74% too optimistic.

spooz's picture

Leaving the €100K accounts alone gives it, at least, the appearance of fulfilling the EU's Deposit Protection Scheme. How much would the big depositors get back if the bank defaulted?

 FT Alphaville speculated that the reason smaller account got haircuts was as a jesture to large depositors in an effort preserve Cyprus' offshore banking center status:

"The spin that this is about spanking money-launderers is rubbish. The 9.9 per cent levy will be the cost of doing business for the average CIS corporate shell, as Pawelmorski notes. More to the point, someone clearly balked at increasing the rate above 10 per cent for big-ticket depositors — because why else distribute pain to small holders to make up for it. Someone has an eye on Cyprus somehow maintaining a future as an offshore banking centre."

derek_vineyard's picture

non event in US markets.  all clear to watch price is right on tv.  gives talking heads something to give us headaches with. watching futures last night they turned up right when europe markets openned.  whats the next black swan?   would a mass suicide at the next fed meeting halt this bull or give it more fuel? 

Floodmaster's picture

Tax havens are dead, everything that is not in a safety box is taxable.

zorba THE GREEK's picture

The progressive tax idea is intended to get popular opinion for the idea.

There are certainly far more small depositors than large ones. Let the few

(wealthy) pay for the many. Where did I hear that before? That mentality,

although popular with the voting masses, always leads to capital flight and

eventually to higher unemployment.

Edward Fiatski's picture

Fun Redshield calculator, courtesy of their agent Reuters - Theft from thy neighbor. 

I left it at 14.95%.

On a serious note, more likely than not, there's going to be a threshold, below which, accounts are untouchable, like, say, 25k.

surfsup's picture

This wreaks of a tax haven war -- something else seems to lurk behind the curtain...  keep digging Tyler... 

Salt's picture

Run the tax to 25% and all small depositors will get an infusion, courtesy of the Russians. That'll pass.

Inthemix96's picture

If this near 16% haircut for YOUR fucking money isnt enough to start murdering the thieving bastards, well, I dont know what the fuck it'll take then.

You try and nick near 16% of my money, I would do you in without fucking hesitating.

Thieving fucking ponces.  Have at the cunts Cypriots, these fuckers are taking the right piss.

Burn this fucker down.