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Eurogroup Press Conference - Live Webcast (And Full Eurogroup Statement)

Tyler Durden's picture


It's 2:30am, do you know where your deposits are? Tune in to see the Eurogroup explain how this is in the best interest of the Cypriot people, how the 'deal' illustrates the solidarity of the European people, and how the worst of the crisis is now behind us.



Live Webcast here...

Here it is - in all its glory. The full Eurogroup statement explaining how there is no need for the Cypriots to vote on this, how Laiki bank is totally liquidated with equity, debt, and uninsured depositors wiped out, and how they believe in some way that this will not end in a disorderly process...




25 March 2013

Eurogroup Statement on Cyprus

The Eurogroup has reached an agreement with the Cypriot authorities on the key elements necessary for a future macroeconomic adjustment programme. This agreement is supported by all euro area Member States as well as the three institutions. The Eurogroup fully supports the Cypriot people in these difficult circumstances.

The programme will address the exceptional challenges that Cyprus is facing and restore the viability of the financial sector, with the view of restoring sustainable growth and sound public finances over the coming years.

The Eurogroup welcomes the plans for restructuring the financial sector as specified in the annex.

These measures will form the basis for restoring the viability of the financial sector. In particular, they safeguard all deposits below EUR 100.000 in accordance with EU principles.

The programme will contain a decisive approach to addressing financial sector imbalances. There will be an appropriate downsizing of the financial sector, with the domestic banking sector reaching the EU average by 2018. In addition, the Cypriot authorities have reaffirmed their commitment to step up efforts in the areas of fiscal consolidation, structural reforms and privatisation.

The Eurogroup welcomes the Terms of Reference for an independent evaluation of the implementation of the anti-money laundering framework in Cypriot financial institutions, involving Moneyval alongside a private international audit firm, and is reassured that the launch of the audit is imminent. In the event of problems in the implement ation of the framework, problems will be corrected as part of the programme conditionality.

The Eurogroup further welcomes the Cypriot authorities' commitment to take further measures.These measures include the increase of the withholding tax on capital income and of the statutory corporate income tax rate. The Eurogroup looks forward to an agreement between Cyprus and the Russian Federation on a financial contribution.

The Eurogroup urges the immediate implementation of the agreement between Cyprus and Greece on the Greek branches of the Cypriot banks, which protects the stability of both the Greek and Cypriot banking systems.

The Eurogroup requests the Cypriot authorities and the Commission, in liaison with the ECB, and the IMF to finalise the MoU at staff level in early April.

The Eurogroup notes the intention of the Cypriot authorities to compensate potential individual victims of fraudulent practices, in line with established legal and judicial procedures, outside the programme.

The Eurogroup takes note of the authorities' decision to introduce administrative measures, appropriate in view of the present unique and exceptional situation of Cyprus' financial sector and to allow for a swift reopening of the banks. The Eurogroup stresses that these administrative measures will be temporary, proportionate and non-discriminatory, and subject to strict monitoring in terms of scope and duration in line with the Treaty.

Against this background, the Eurogroup reconfirms,as stated already on 16 March, that – in principle - financial assistance to Cyprus is warranted to safeguard financial stability in Cyprus and the euro area as a whole by providing financial assistance for an amount of up to EUR 10bn. The Eurogroup would welcome a contribution by the IMF to the financing of the programme. Together with the decisions taken by Cyprus, this results in a fully financed programme which will allow Cyprus’ public debt to remain on a sustainable path.

The Eurogroup expects that the ESM Board of Governors will be in a position to formally approve the proposal for a financial assistance facility agreement by the third week of April 2013 subject to the completion of national procedures.


Following the presentation by the Cyprus authorities of their policy plans, which were broadly welcomed by the Eurogroup, the following was agreed:

1. Laiki will be resolved immediately - with full contribution of equity shareholders, bond holders and uninsured depositors - based on a decision by the Central Bank of Cyprus, using the newly adopted Bank Resolution Framework.

2. Laiki will be split into a good bank and a bad bank. The bad bank will be run down over time.

3. The good bank will be folded into Bank of Cyprus (BoC), using the Bank Resolution Framework,after having heard the Boards of Directors of BoC a nd Laiki. It will take 9 bn Euros of ELA with it. Only uninsured deposits in BoC will remain frozen until recapitalisation has been effected, and may subsequently be subject to appropriate conditions.

4. The Governing Council of the ECB will provide liquidity to the BoC in line with applicable rules.

5. BoC will be recapitalised through a deposit/equity conversion of uninsured deposits with fullcontribution of equity shareholders and bond holders.

6. The conversion will be such that a capital ratio of 9 % is secured by the end of the programme.

7. All insured depositors in all banks will be full y protected in accordance with the relevant EU legislation.

8. The programme money (up to 10bn Euros) will not be used to recapitalise Laiki and Bank of Cyprus.

The Eurogroup is convinced that this solution is the best way forward for ensuring the overall viability and stability of the Cyprus financial system and it s capability to finance the Cyprus economy.


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Sun, 03/24/2013 - 21:34 | 3370550 Zero_Sum
Zero_Sum's picture

"Troika to contact Russian gov't on deal" = "Hey Putin.... knock knock." "Who's there?" "SUCK IT!"

Sun, 03/24/2013 - 21:35 | 3370571 MrX
MrX's picture


Sun, 03/24/2013 - 21:38 | 3370584 Zer0head
Zer0head's picture

Officials say a vial containing a virus that can cause hemorrhagic fever has gone missing from a research facility in Galveston, but say there's no reason to believe there's a threat to the public.

Sun, 03/24/2013 - 21:40 | 3370598 Spider
Spider's picture

No Cypriot parliament vote needed??  Dont get those pesky democratically elected representatives involved - well played EU...

Sun, 03/24/2013 - 21:43 | 3370615 Western
Western's picture

Will somebody please find out;


1) Where are the Cypriot politicians banking and getting their paycheque from?


2) Where are the Cypriot police banking and getting their paycheques from?


Seriously, why the fuck are these people still working if their money is about to evaporate? I suspect it's because their money is in tact, safe, corrupt.

Sun, 03/24/2013 - 21:59 | 3370700 Supernova Born
Supernova Born's picture

Global banksters astride humanity... 

Fuck us all.

Sun, 03/24/2013 - 22:43 | 3370837 TwoShortPlanks
TwoShortPlanks's picture

Sheldon Schaeuble:    Knock-Knock-Knock "Putin?"...Knock-Knock-Knock "Putin?"...Knock-Knock-Knock "Putin?"

Sun, 03/24/2013 - 22:52 | 3370886 JPM Hater001
JPM Hater001's picture

Remember Brando and the balls...

Bat shit crazy

Mon, 03/25/2013 - 01:42 | 3371262 Manthong
Manthong's picture

“newly adopted Bank Resolution Framework”

Whew!.. a breath of fresh air.

So much better than the old bank framework where there was an expectation that private property was secure.

Mon, 03/25/2013 - 01:51 | 3371277 StychoKiller
StychoKiller's picture

WHY Cyprus was put through all this:

[quote] The Eurogroup welcomes the Terms of Reference for an independent evaluation of the implementation of the anti-money laundering framework in Cypriot financial institutions, involving Moneyval alongside a private international audit firm, and is reassured that the launch of the audit is imminent. In the event of problems in the implement ation of the framework, problems will be corrected as part of the programme conditionality. [/quote]

Emphasis mine.

Mon, 03/25/2013 - 05:27 | 3371379 silver surfer
silver surfer's picture



LINK TO: “newly adopted Bank Resolution Framework” 

Read it and weep, you will be dead and gone before you finish.




Mon, 03/25/2013 - 02:49 | 3371315 Paracelsus
Paracelsus's picture

Did you mean Humphrey Bogart in the Caine Mutiny,with the ball bearings?

Sun, 03/24/2013 - 22:01 | 3370707 toys for tits
toys for tits's picture

I bet this wouldn't have been the decision of the Troika if any of those assholes had money in the Cyprus banks.

Sun, 03/24/2013 - 22:01 | 3370708 uncle_vito
uncle_vito's picture

Sounds like Obama.  Do not need that pain in the ass congress involved.

Mon, 03/25/2013 - 02:42 | 3371302 Lore
Lore's picture


In what dictionary does the word "resolve" mean "STEAL?"

They think they're so clever, taking the PRIVATE PROPERTY of these people, and expect no consequences???



Sun, 03/24/2013 - 22:04 | 3370725 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

"All of your base...base...base...Are belong to Us...Us...Us..."


And why the hell did they have to call it the "Troika"? Sounds creepy. Couldn't they have called it "The Committee for Public Safety"...or maybe "Department of Euroland Security""?

Sun, 03/24/2013 - 22:42 | 3370852 Buck Johnson
Buck Johnson's picture

They are downplaying this big time, I have a very strange feeling that we may be looking at the start of another false flag.  Also ask yourself this, if the economy was about to tank wouldn't be better to blame the tanking of it on a sickness that is spreading around the nation.  And on top of that I'm sure that this fever is tough on old people.

Sun, 03/24/2013 - 22:46 | 3370862 knukles
knukles's picture

Grillo and his ilk.

Sun, 03/24/2013 - 22:50 | 3370878 JackT
JackT's picture

Rabid skunks in Russia and now fevered rodents in the US..sounds about right

Sun, 03/24/2013 - 21:47 | 3370641 sunnydays
sunnydays's picture

Yeah, but then Putin will say "we never forget"  We will take you down!  I will look forward to that!  Wait until the Cyprus people start destroying the banks too!

  I will cheer the Russians on too!   Take the EU Down!  

Sun, 03/24/2013 - 22:03 | 3370716 permafrost
permafrost's picture

He had his chance.

Sun, 03/24/2013 - 22:43 | 3370853 Assetman
Assetman's picture

Putin really doesn't need to do any such thing.

The Russian Mafia, however, will likely be taking pot shots at selected EU leaders... if indeed they were harmed financially.


Sun, 03/24/2013 - 21:52 | 3370673 defencev
defencev's picture

As Mathematicians say: Q.E.D. Where is collapse, abyss etc predicted by "Tyler"? Myself and others who said from the very beginning that this is nonevent proved to be correct once again.

Sun, 03/24/2013 - 21:55 | 3370685 Confundido
Confundido's picture


Mon, 03/25/2013 - 01:57 | 3371282 Manthong
Manthong's picture

OK, from a physicists perspective, relatively speaking, splitting the 99th nucleus is a non-event giving the entirety of a chain reaction.

Sun, 03/24/2013 - 22:00 | 3370704 pods
pods's picture

Opening up the possibility of stealing deposit accounts in order to bail out the banks is hardly a "nonevent."

If that little nugget of information resonates, it could detonate the entire world of fiat banking.


Sun, 03/24/2013 - 22:28 | 3370805 defencev
defencev's picture

You guys living in your fantasy world based on wrong ideology, ignorance and brainwashing by blogs like that. There is no resonance in your sense of the word. Stock markets in Asia are up and rally will continue.Your stupidity will never pay off.

Now, where is that bitcoin chart?

Sun, 03/24/2013 - 22:42 | 3370850 pods
pods's picture

That is why I don't use my stupidity and play around in "markets."


Sun, 03/24/2013 - 22:45 | 3370858 kridkrid
kridkrid's picture

and yet, here you are in the comments section of said blog. You'll claim that you are trolling, but the reality... you're trying hard to convince yourself of something.

Sun, 03/24/2013 - 23:29 | 3371024 Renewable Life
Renewable Life's picture

Bitcoin is at $71 as I type this, and if your so fucking stupid to think that "confiscating rich peoples money in banks they thought were safe two weeks ago, is the answer, who's the dumbfuck who's brainwashed and living in a fantasy world now??

I can tell your just some schmuck with no money and a big mouth, because if you had real money, money above the fantasy insured level the EU is talking about, you'd be shitting your pants right now and trying to transfer it out of the EU banks the minute they open tomorrow!! Which is what 100's of billions will be doing over the next two days or week across the EU, Spain, France, and Italy to be specific! 

But good luck with that thesis, the stock market never goes down bullshit, it worked out great for the citizens of Cyprus, and the foreign account holders, im suure it will be different this time, everywhere else!

Sun, 03/24/2013 - 22:07 | 3370733 kridkrid
kridkrid's picture

everyhing is a "non event" until the event that "nobody could have seen coming" brings the house down. This isn't an "if" this is a "when".

Sun, 03/24/2013 - 22:16 | 3370764 Banksters
Banksters's picture

Non event?  Closing banks, invoking capital controls, and  stealing depositors money is a fucking a typical day in the neighborhood.

Sun, 03/24/2013 - 22:20 | 3370777 ebworthen
ebworthen's picture

I remember people who kept saying that about Mt. St Helens too.

Sun, 03/24/2013 - 22:39 | 3370834 earleflorida
earleflorida's picture

'your hubris is defencevless, as is your logic equally impaired your lack of knowlege regarding human nature that dictates all rhymings of history' 

'if and only when you rest your laurels upon the politicians purse, that the real carnage manifest itself-- like a hybernating bear in its winter den that finds itself awoken in a sinkhole before the first thaw-- pities naught the fist foul that crosses ones path, for hunger outwits ones instinct'

Sun, 03/24/2013 - 21:32 | 3370551 ShortTheUS
ShortTheUS's picture

Attenion Rusisan Oligarchs:


You no longer has it...

Sun, 03/24/2013 - 21:35 | 3370569 Zero_Sum
Zero_Sum's picture

"I also like savings de moneys... just not in Cyprus banks."

Sun, 03/24/2013 - 21:46 | 3370603 Zero_Sum
Zero_Sum's picture

Still chuckling over your awesome reference, ShortTheUS. In honor of that timely post, I offer this for anyone who didn't get the joke:

Or for anyone who just wants to bask in the irony.

Sun, 03/24/2013 - 21:50 | 3370655 Ineverslice
Ineverslice's picture



Dmitri....Is this true, what he is saying?

Sun, 03/24/2013 - 21:32 | 3370552 BaggerDon
BaggerDon's picture

$$  New national anthem for CYPRUS and the FEDS free mkts...

Sun, 03/24/2013 - 21:44 | 3370629 WmMcK
WmMcK's picture

Everybody knows it's coming apart ...

Sun, 03/24/2013 - 21:36 | 3370555 machineh
machineh's picture


It's for their own good. Doctor's orders! 

Moral hazard occurs when victims can vote against their own fleecing.

Does the defendant get a vote on the jury? God forbid!

As Led Zeppelin used to sing ... WE ARE YOUR OVERLORDS


Sun, 03/24/2013 - 21:42 | 3370612 toys for tits
toys for tits's picture

We don't need to bother Parliament about changes we made to those pesky bankruptcy laws.  We're now going to have a good bank, bad bank.

We've already been running good cop / bad cop on you people.

Sun, 03/24/2013 - 22:04 | 3370723 permafrost
permafrost's picture

Zere iz no need for democracy.

Sun, 03/24/2013 - 22:30 | 3370810 therover
therover's picture

+1 for the Zep reference. 

Sun, 03/24/2013 - 22:49 | 3370876 earleflorida
earleflorida's picture

...this too, shall not pass, before the advent of tomorrows, morrow 

Sun, 03/24/2013 - 23:32 | 3371035 thisandthat
thisandthat's picture

You can take Germany out of Nazism, but you can't that Nazism out of Germany....

Mon, 03/25/2013 - 02:46 | 3371313 Lore
Lore's picture

This isn't Germany. This is "Troika."  The best thing Germans could do for the German people is get the heck out of the Euro.

Mon, 03/25/2013 - 12:36 | 3372751 thisandthat
thisandthat's picture

And troika is ECB as well, which means largely Germany - just hear Schaulble talk....

Mon, 03/25/2013 - 16:48 | 3374077 Lore
Lore's picture

These people are chameleons. They're only 'German' until the money is gone.

Sun, 03/24/2013 - 21:33 | 3370559 cristo
cristo's picture

come on fuckers speak already !

Sun, 03/24/2013 - 21:34 | 3370561 zorba THE GREEK
zorba THE GREEK's picture

Schaeuble: Hello Russia, sorry you just got screwed.

Sun, 03/24/2013 - 21:56 | 3370690 pods
pods's picture

Gazprom exec gets money taken by the EU.  

Gazprom exec sends a note to EU:

"Who runs Bartertown?"


Sun, 03/24/2013 - 22:52 | 3370888 earleflorida
earleflorida's picture

they can't all be bottom bitches,... c'mon

Sun, 03/24/2013 - 21:35 | 3370567 fourchan
fourchan's picture

are the people conditioned enough to take this buggery?

Sun, 03/24/2013 - 22:03 | 3370718 ziggy59
ziggy59's picture

The bleating says yes...

Sun, 03/24/2013 - 22:54 | 3370896 earleflorida
earleflorida's picture

so many asses and only one broomstick

Sun, 03/24/2013 - 21:35 | 3370568 DavidC
DavidC's picture

Bank runs start tomorrow in the rest of the Eurozone.


Sun, 03/24/2013 - 21:42 | 3370611 Bangin7GramRocks
Bangin7GramRocks's picture

Bullshit! Life goes on as usual.

Sun, 03/24/2013 - 21:55 | 3370686 fonzannoon
fonzannoon's picture

Nah i'm with DavidC. I must be dreaming. Did they really just skank everyone's deposits over 100k and give not give them a say in the matter? This will be contained? 

Sun, 03/24/2013 - 22:15 | 3370762 disabledvet
disabledvet's picture

"yes" and "we will see." they can't be faulted for doing nothing...they can be faulted for doing this of course. again this is a "working group"...Russia will be informed of the decision...nothing more. There's already a massive British military presence on the island...there will be no Russians coming ashore to "take it to the man." it appears they closed my "European Court of Justice loophole" as well...but that would be my approach. "Use the Americans' good offices to file claims with the appropriate (or inappropriate) Agencies." this thing came a real surprise to me...can't say it was a surprise to the President "cuz he ain't sayin sheeet" but no one wants to arrive in the Middle East "with the sound of car bombs going off in Baghdad." so sure...this strikes me a shocker actually. "game, set, match Eurogroup." And Prada of course. What's next? Wagner?

Sun, 03/24/2013 - 21:45 | 3370626 Stuart
Stuart's picture

yep, seriously.  What would you do if you had large deposits at banks in Italy, Portugal, Greece... or really anywhere in Europe for that matter.    They've all been 'Corzined' BY THE STATE!!!   Holy fuck what a unbelievably terrible precedent this sets, everywhere. 

Sun, 03/24/2013 - 22:33 | 3370817 sunnydays
sunnydays's picture

I seriously hope the FUCK bank runs do start!  The people will be speaking then - Loud and Clear!  You can NOT steal our money!  

Sun, 03/24/2013 - 21:38 | 3370576 MFLTucson
MFLTucson's picture

See how these gangsters work?  Take it away from the people of the country to vote on and shove it in their ass.  Sound familar, kinda like Pelosi, Reid and Obama with Obamacare!  Hows that workin out?

Sun, 03/24/2013 - 21:37 | 3370577 SDShack
SDShack's picture

The fact that the bankers had to do an end run around parliament shows how terrified they must be about the whole house of cards collapsing if this goes to a vote. As so many have said so many times, they are desperate to do ANYTHING to keep it all from unraveling and will ignore any law or rule. They are not even pretending to hide it anymore. I think they are just one spark away from losing total control and having revolution spring upon them.

Mon, 03/25/2013 - 02:51 | 3371316 Lore
Lore's picture

The thing that they apparently don't recognize is that the richest depositors are also the most dangerous. They have just fucked with big, old, powerful money.  THAT HAS CONSEQUENCES in a way that taking candy from babies does not.  If I had any part in this, I would be looking over my shoulder for the rest of my days.

Sun, 03/24/2013 - 21:37 | 3370579 Temporalist
Temporalist's picture

Fuck Microsoft!

Sun, 03/24/2013 - 22:54 | 3370894 DoChenRollingBearing
DoChenRollingBearing's picture

Victim of Windows 8?

Sun, 03/24/2013 - 21:37 | 3370581 ThunderingTurd
ThunderingTurd's picture

How can there be no vote? How can another entity legislate for a sovereign country? Why do I feel stupid posting this question?

Sun, 03/24/2013 - 21:40 | 3370602 Temporalist
Temporalist's picture

"How can there be no vote? How can another entity legislate for a sovereign country?"


Because in the New Normal Facism 99.9999% of people don't matter.  You are a serf, and you will OBEY!

Sun, 03/24/2013 - 21:43 | 3370614 Water Is Wet
Water Is Wet's picture

This is how all 'deals' start.  Then they fall apart.

Sun, 03/24/2013 - 21:40 | 3370582 Quinvarius
Quinvarius's picture

I am glad everyone is "risk on" full knowing that banks are going to be allowed to start going under again.  Frankly, I am disturbed.  The only acceptable outcome was a full backstop and prop job.

At least Legarde had dinner with a man. 

Sun, 03/24/2013 - 22:33 | 3370818 Ropingdown
Ropingdown's picture

or "had a man for dinner."

Sun, 03/24/2013 - 21:38 | 3370586 Cacete de Ouro
Cacete de Ouro's picture

The Russian assassins have reached Brussels it seems, on the Eurostar no less

Sun, 03/24/2013 - 21:38 | 3370587 toys for tits
toys for tits's picture

That fucking Schaeuble tried to pull a practical joke on me the other day.  He wheeled around in his wheelchair and had his dick hanging out of his pants with something on it.

The tip of his dick was stuck inside the cap of a bic ink pen.  But this is where he got me, because it actually wasn't stuck at all, he had plenty of room to move it around.

That fucker tricked me just like he did Cypriot, destroying a massive number of jobs along the way.

Sun, 03/24/2013 - 21:38 | 3370589 SheepDog-One
SheepDog-One's picture

We've got a done deal! Resume your usual Central Bank piracy...sorry we can't give you peasants any details it's none of your business just empty your pockets and get back on those oars and ROW dammit!

Sun, 03/24/2013 - 21:40 | 3370597 Seize Mars
Seize Mars's picture

Of course there can be no vote of parliament.

1) They've got an Empire to run. Who needs all that bullshit

2) That way all the dirty work gets done and none of the MP's need to look like the bad guys. They call all look like the good guys. "Ah, it was out of our hands..."

Sun, 03/24/2013 - 21:39 | 3370599 grunk
grunk's picture

Why were the Troika so pissed off last week when the Parliment was voting down proposals?

Suddenly you don't need the Parliment to vote?

Sun, 03/24/2013 - 22:18 | 3370772 disabledvet
disabledvet's picture

now that you mention it...where's Ghordius?

Sun, 03/24/2013 - 21:41 | 3370606 JR
JR's picture

This is a very good example of what it means to lose your sovereignty. You don’t need a parliament anymore; you don’t need a Congress anymore, you don’t need a president anymore. You just need Bernanke or the Troika. If the banks need the money, the banks will decide how much they need and from whom. Congress doesn’t even need to come back from their stupid vacations because Bernanke will decide. Congress gave the power to the bankers in 1913 and went home.

Loss of sovereignty means the loss of government, loss of sovereignty means the loss of representation, loss of sovereignty means the loss of freedom.

These bankers have taken the sovereignty from these European nations and they want to take it from America; and they will unless somebody stops them.

Sun, 03/24/2013 - 22:35 | 3370824 Jim in MN
Jim in MN's picture

I'll just leave this here....again....if someone would like to forward it to oh say Rand Paul and Keith Ellison for a jointly sponsored bill, that would be a nice zolt in the nuts tomorrow morning.

'List of Demands to Protect the People of the United States of America from Financial Catastrophe'

Just the basics: Sack Bernanke, close NYC office of the Fed and Treasury, prohibit certain of their market-distorting practices, lifetime ban on Goldman, Morgan, other TARP recipients from Federal employment, contact bans between them and government, mark-to-market reinstatement.....nothing major, just a first step in a peaceful direction. 

Sun, 03/24/2013 - 22:41 | 3370842 FeralSerf
FeralSerf's picture

The bankers have already taken sovereignty away from Americans.  Remember in 2008 when Hank Paulson told us martial law would begin if he wasn't given $800 billion of the people's money to give to the bankers?

Mon, 03/25/2013 - 00:01 | 3371098 SDShack
SDShack's picture

Yep, politicians are not even relevant anymore. They are shown to be completely owned by the bankers with this move. The playbook has now been updated, and will be repeated again and again. The next crisis will dictate this same "solution". As a result, The only hope is the anti-EU parties everywhere outside of Germany will be strengthened. Besides the bankers, the biggest political winner in this will be Merkel, as she will be seen as stronger in Germany, since she was able to enforce her will on Cyprus. But she and Germany will be viewed much more negatively (if that is even possible) in the periphery. She may have saved her re-election with this gambit, but when she plays this hand again with the next EU insolvent, she may find that they will not continue to roll over if the anti-EU coalition builds. No wonder the bankers had to try ANYTHING to prevent parliament from having a say in this.

Mon, 03/25/2013 - 00:30 | 3371151 lewy14
lewy14's picture

Wait a minute. The bankers?

It sounds to me like the terms of the deal resolve the banks in question the old fashioned way - according to the principles of the capital structure.

The equity holders and the debt holders are wiped. The uninsured depositors lose out to the extent necessary to recapitalize the bank.

Sure there is some arbitrary decision making about splitting the good bank from the bad bank at Laiki etc but nothing out of whack with respect to the capital structure. Certainly nothing crazy like the first deal that the Cypriot parliament (rightly) rejected.

Lot's of bankers are going to be out of a job. Lots of bank investors are going to be screwed.

What's not to like from the Austrian perspective?

The banks were insolvent, there was a huge fuckin' hole, and it got plugged by the people who were, according to the capital structure, on the hook to plug it.

What's the problem? I yield to none in my contempt for "banksters" and I may well be missing something but which "banksters" are walking away bailed out here?

Mon, 03/25/2013 - 00:40 | 3371174 Jim in MN
Jim in MN's picture

I understand that the Greek banks have a lot to lose here, which is in turn putting the core Troika bank(sters) at risk.  Otherwise why not just write it off?  THAT would be Austrian.  Don't plug the hole, shoot the bank and let the live assets go elsewhere.

Mon, 03/25/2013 - 01:00 | 3371215 lewy14
lewy14's picture

Sorry - I spoke imprecisely.

By "plugged" I meant "vaporized".

As in, the value of their investments and deposits are erased from the liabilities side of the balance sheet. They are no more. This is the Austrian way.

Laiki is resolved. Wound up (or down, if you prefer). El Finito. Gonzo. Drwnd. This too is Austrian.

There are still some good assets in Laiki - and insured deposits which must be made honored. They have to go somewhere. Why not Bank of Cyprus? There are some arbitrary decisions taken here but it's not clear to me these are out of scope for the banking regulators. That's what they do. They regulate banks. Again, with respect to who gets hurt in the capital structure, it seems in line.

If the "Greek banks" have a lot to lose here, it's not clear how their bacon is getting saved by this deal. If they are bondholders or big depositors they just got reamed.

Again, I could be missing something - I almost certainly am - I'm just not seeing justification for the (very often perfectly justified) reflexive vitriol against the "bankers".

Not trying to defend them so much as trying to see where blame really lies. 

Mon, 03/25/2013 - 02:57 | 3371319 Just Ice
Just Ice's picture

I previously opined these banks should be allowed to fail so that part's good as you indicate.  However, it is unclear that the bondholders were wiped as there was an earlier statement that senior debt holders would have to "contribute" to the recap.  "Contribute" does not sound "wiped".  Also, there was earlier mention about monies realized from the restructure going to pay "other debts" which sounded like certain creditors (govt entities, favored financial institutes?) are to receive priority over the uninsured depositors in access to assets.  Those were the two problems I felt should be clarified.

Mon, 03/25/2013 - 03:12 | 3371326 lewy14
lewy14's picture

@Just Ice - I interpreted "full contribution" as wiped. Confirmation in the FT:

Both junior and senior bondholders in Laiki will be wiped out, a first for a eurozone bailout country; in other bailouts, senior bondholders have not faced such losses.

Don't know about your second point; agreed it would be troubling but "official sector" as opposed to "private sector" will become impared approximately... never.

I'd turn my original post around - rather than ask what might be wrong with this deal (invevitably it will be something), let me just observe that there are a hell of a lot of things in this deal which the house view here at Zero Hedge has been begging for since the onset of the financial crisis.

And now it happens and people are like "omg total theft"...


Mon, 03/25/2013 - 04:34 | 3371365 Just Ice
Just Ice's picture

I would view the second point as that akin to the MF Global problem...when commodity account holders were going to be placed behind JPM as creditor in claim priority it was, essentially, theft (whether technically legal to get by with or not).  But, yeah, I think we pretty well concur.      

Mon, 03/25/2013 - 01:22 | 3371243 Seize Mars
Seize Mars's picture

I'll tell you what the problem is. Waaay over here, in this backwater filled with impudent peasants known as America, my gasoline price just went up a little more. Also a loaf of bread is up too. Not all at once, but bit by bit. And where I come from that's called stealing.

Anyways when you say "bankers will be out of a job" you mean some dumbass working as a loan officer in...Cyprus? Oh yes I suppose so. Meanwhile, Corzine is still free, isn't he?

Sun, 03/24/2013 - 21:42 | 3370610 Cacete de Ouro
Cacete de Ouro's picture


"we symathise with the Cypriot people at this time"  - fuck you curly boy

Sun, 03/24/2013 - 21:43 | 3370618 SheepDog-One
SheepDog-One's picture

Didn't we hear from Russia earlier their only acceptable scenario is 'Cyprus out of the Eurozone'?

I guess Merkel just figures she can bitch slap them around like a Greek?

Sun, 03/24/2013 - 21:52 | 3370661 Haole
Haole's picture

I'd like to see the Russians just start whacking all these fucks like they're playing duck shoot at the country fair.

Sun, 03/24/2013 - 21:43 | 3370619 Leto II
Leto II's picture

We stole it fair and square!

Sun, 03/24/2013 - 21:44 | 3370620 pan
pan's picture

I am not installing microshyte fucking silverlight!

Sun, 03/24/2013 - 21:44 | 3370623 dunce
dunce's picture

Treating Russia like a red headed step child is not clever. Hitler was outraged by the Treaty of Versailles, it took him about 20 years but he got his revenge. In 20 years all our troops could be out of Europe and Russia could be in better shape. What goes around, comes around.

Sun, 03/24/2013 - 21:46 | 3370637 gwar5
gwar5's picture

I thought about CNBC's Maria Bartiromo's signature broadcast sign-on question, "Do you know where your money is?"  just the other day.


I couldn't help but think that the FED might have to make her change it from now on so it won't freak people out.

Sun, 03/24/2013 - 21:54 | 3370680 otto skorzeny
otto skorzeny's picture

maria's is safe-she's married to a juiced in WS Tribesman

Sun, 03/24/2013 - 21:46 | 3370638 geewhiz190
geewhiz190's picture

ECB will guarantee deposits.  no banks runs, no panic, no worries.  a non-event

Sun, 03/24/2013 - 21:49 | 3370644 caimen garou
caimen garou's picture

cant watch thoes fools anymore they don't seem to enthusiastic about this round of utter bullshit, god help this fucked up planet!

Sun, 03/24/2013 - 21:48 | 3370645 ThunderingTurd
ThunderingTurd's picture


Sun, 03/24/2013 - 21:48 | 3370648 geewhiz190
geewhiz190's picture

10 billion euros isn't much in the scheme of things. go to sleep all

Sun, 03/24/2013 - 22:10 | 3370748 WoodMizer
WoodMizer's picture

10bn used as collateral and leveraged to support many other insolvent banks smells like 2008 to me.

Why do you think the ECB is willing to push the envelope for a measly 10bn?

Sun, 03/24/2013 - 22:26 | 3370797 disabledvet
disabledvet's picture

exactly MaxHeadroom. this is not a "mountain out of a mole-hill" thingy. there is the "uncertainty principle" but other than that this thing...and i hate to say this...but it looks to have been done by TRUE professionals. (gotta say besides being impressed at a certain level i'm a little envious) the only mistake i see was naming themselves "the eurogroup." the fact that that group is doing the presentation and not the PM's is not good. Secretary of State Kerry..."you've been warned." Get you best folks on this one. And by that i mean UNBIASED folks in addition to being "that good." You just made a trip over there to pave the way for the President's trip...i know i'm pissed off by this and i'm a professional couch potato.

Sun, 03/24/2013 - 21:48 | 3370649 BaggerDon
BaggerDon's picture

how many god damn hands does she have??on the other hand

Sun, 03/24/2013 - 21:53 | 3370651 Haole
Haole's picture

Alright so when comes the news they're going to do the same thing in every other Eurozone nation?  Spain first or Italy... Tough choice.  Can't wait to see Farage in Parliament with this fuel under him.

Sun, 03/24/2013 - 21:49 | 3370657 MyBrothersKeeper
MyBrothersKeeper's picture

No vote simply means the politicians don't have to be accountable.  As Obama has demonstarted here in US:  you have no need of a plan to fix anything as long as you can paint your opponents as worse than you.  My question is what happens to the bondholders of the soon to be closed bank?  And what is the extent of the deriviatives on those assets?

Sun, 03/24/2013 - 23:20 | 3370991 Assetman
Assetman's picture

The bondholders are going to be wiped out in the bad bank... and will likely absorb significant losses in the good bank, as was stated in the Q&A session of this announcement.  The other thing that was addressed was that the Cypriot legislature had previously voted (November 2012) on provisions that would have allowed an IMF-type restructring to take place.  The only thing missing was the approval of capital controls, which was approved a few days ago.

The good news is that the final solution is a good old fashioned private sector bank restructring-- I'm sure patterned from the IMF template.  Take good assets based on insured deposits (liabilities) and place it in a good bank... and place the rest in a bad bank structure and unwind it, following the seniority of the capital structure.

The bad news... is that the EU has already opened the can of worms on insured depositors.  If push comes to shove, they WILL throw insured depositors under the bus, as the original tax levy on depositor idea was the EU's own stroke of genius.  At this stage, it appears the IMF was able to convince enough people that sacrificing one bank and restructuring another one was the better route.

If the next banking is a bigger crisis and derivatives are involved, make no mistake what the EU is likely to do in order to protect is own banking system.  Cyprus was a workable solution that didn't need an EU solution imposed via depositor levies-- yet they opened that Pandora's Box anyway.


Mon, 03/25/2013 - 02:57 | 3371320 Caggge
Caggge's picture

If the politicians don't stand up and demand a vote, they should be accountable. They are hired to represent the people that voted for them to represent them. Hang em if they don't throw a shit fit.

Sun, 03/24/2013 - 21:50 | 3370658 ebworthen
ebworthen's picture

Grasping at straws!

They are desperate!

Tear down the Central Banks and their political puppets!

Sun, 03/24/2013 - 21:51 | 3370662 ziggy59
ziggy59's picture

More Jedi Farce Crap...

Sun, 03/24/2013 - 21:52 | 3370671 Midland
Midland's picture

I can't see the webcast - it just says "Bad Request". Must be the feed for the Cypriot people.

Sun, 03/24/2013 - 21:52 | 3370674 DavidC
DavidC's picture

I really believe that they don't know what they've just done.


Sun, 03/24/2013 - 21:53 | 3370678 ziggy59
ziggy59's picture

How'd you like to be a fly on the wall(probably in next building would be a good idea) when Troika has to let Russia know of the deal.

Sun, 03/24/2013 - 21:53 | 3370679 BaggerDon
BaggerDon's picture

so much for private property rights,,,,,facscists...

Sun, 03/24/2013 - 21:54 | 3370682 Duke Dog
Duke Dog's picture

I'm a little surprised at the response from zh posters. This is exactly what should have happened - insured deposits are made whole and protected, while everyone else is fucked. Exactly the way it should be and exactly what should have happened to every bank in the US that was/is insolvent back in 2007-8 - we may actually be having a REAL fucking recovery by now if it had been handled the way it was supposed to be. Sure the average citizen/taxpayer would have been fucked hard, but not nearly as hard and for as long a period of time as the fucking we have headed our way now.

Sun, 03/24/2013 - 21:56 | 3370689 toys for tits
toys for tits's picture

Don't you see something missing here?

Equity and bondholders are supposed to be wiped out first.  But that's too big of a hassle.

Sun, 03/24/2013 - 22:34 | 3370820 AndrewJackson
AndrewJackson's picture

I agree, but does anyone know what the market cap of cyprus bank debt/equity is? Would be interesting to see how many billions missed the chopping block. Tylers?

Sun, 03/24/2013 - 21:58 | 3370694 DavidC
DavidC's picture

No. Bondholders and shareholders, the ones who took the risk, should be the first ones in line, NOT depositors. The reason the ECB doesn't want that is because it's accepted Greek debt as collateral from Cyprus already and doesn't want to take the hit - although what may happen now they might wish they'd done that.


Sun, 03/24/2013 - 22:31 | 3370813 Frank N. Beans
Frank N. Beans's picture

see #1 above:


"1. Laiki will be resolved immediately - with full contribution of equity shareholders, bond holders and uninsured depositors..."

Sun, 03/24/2013 - 22:37 | 3370825 bsdetector
bsdetector's picture

Yes, this is the way the system should have worked in the US:

You are right on Duke Dog.

Sun, 03/24/2013 - 23:46 | 3371068 Assetman
Assetman's picture

Agreed.  Duke Dog is right on.

Not a great solution for any depositor, but my understanding is that equity and bondholders get worse.  This is not only true with Laiki but with Cyprus Bank as well.

One thing that has been overlooked but hasn't is... who at these banks are going to be held accountable for all the terrible investment decisions?  What's going to happen to these banking executives that abused their fiduciary priviledges (as 'duty may not be the proper term in Cyprus)?


Mon, 03/25/2013 - 02:59 | 3371322 Lore
Lore's picture

Exactly. Where in all of this is rule of law? 

Sun, 03/24/2013 - 22:38 | 3370828 DavidC
DavidC's picture

Saw that after I'd posted, but that's only Laiki.


Sun, 03/24/2013 - 22:39 | 3370832 MsCreant
MsCreant's picture

We cannot, in any shape or form, call anything involved in this, a default.

Credit Event Horizon will suck the world into a void that we will not be able to pull out of.

Sun, 03/24/2013 - 21:55 | 3370683 toys for tits
toys for tits's picture

These troika fucks have devastated Cyprus' economy as badly as it would be if they had declared war.

Sun, 03/24/2013 - 23:02 | 3370904 bsdetector
bsdetector's picture

I am not sure about that T for T. I've been fascinated by the Cyprus situation from the start. It appears to me, from wading through lots of information, misinformation and disinformation, that the government of Cyprus was trying to dump this loss on all depositors in all banking institutions. The Troika, having been presented with that plan approved it. Then it went public and all hell broke loose. It seems like the masses prevailed in this situation, whereas in the US the masses lost. Only the depositors in the insolvent institutions along with the shareholders and bondholders will bear the brunt of the losses in Cyprus. The Cypriots may want to consider the replacement of their parliamentarians for even considering Plan A. Cyprus will be a stronger country with this resolution.

Sun, 03/24/2013 - 23:40 | 3371056 Assetman
Assetman's picture

If your assertions are true, the Troika should have never considered approving it, as it opens the door for others to consider it as viable option.  If the EU wants to avoid the prospect of future bank runs, the Troika might want to change their tune... pronto.

Sun, 03/24/2013 - 23:52 | 3371079 bsdetector
bsdetector's picture

I agree Aman. And that is probably why they will remain quiet about this fiasco. If they thought Cyprus was inconsequential and the elites could pull this off then they were probably not paying close attention. I think they learned a lesson and won't make this mistake again.

Sun, 03/24/2013 - 21:55 | 3370684 DavidC
DavidC's picture

Olli-uh Rehn-uh is-uh one-uh of-uh those-uh people-uh who-uh can't-uh stop-uh saying-uh uh-uh.


Sun, 03/24/2013 - 21:57 | 3370692 ziggy59
ziggy59's picture

Vlad's Put in 3..2..1...

Sun, 03/24/2013 - 22:38 | 3370829 Apostate2
Apostate2's picture

I had sashimi for breakfast and the glow has kicked in (disclaimer). This is Vlad's Put, or at least with his acquiescence. The so-called oligarchs have always been problematical and quixotic with their support (whilst stashing the tax-free dosh). The EU needs the Reluctant Russians on board with the Syria 'rescue' and now if rumours be true the main obstacle is hospitalized with a few lead-made holes (also Mister B the blabbermouth had his mouth sealed in Ascot). Rescues cost, thus oligarchs pay. Call it a delayed tax payment laundered through Cyprus (the patsy and bolthold) to the EU to fund all and necessary (and keep their cartel going). Vlad got the shield removed from borders and most likely a new lease for his port. Next stop...

(note to self: martinis are more enjoyable) 

Sun, 03/24/2013 - 21:58 | 3370696 Everybodys All ...
Everybodys All American's picture

I fail to see how this helps anyone in Cyprus longer term. Now is the time to leave the EU. Take the bank restructuring jammed down by the ECB if you will but if Cyprus doesn't leave the EU now then the Cypriots are the biggest losers on the planet.

Sun, 03/24/2013 - 22:01 | 3370712 DavidC
DavidC's picture

It doesn't.


Sun, 03/24/2013 - 22:05 | 3370727 Everybodys All ...
Everybodys All American's picture

That's my point. And any elected official in Cyprus better react for his people or face the consequences.

Sun, 03/24/2013 - 22:18 | 3370774 fonzannoon
fonzannoon's picture

i'm still waiting for my teevee to show me the cypriot people celebrating in the streets.

Sun, 03/24/2013 - 23:11 | 3370950 Dr. Engali
Dr. Engali's picture

This is on teevee? Where? On the sci-fi channels right before the infomercials?

Sun, 03/24/2013 - 22:23 | 3370785 DavidC
DavidC's picture

Agree 100%.


Sun, 03/24/2013 - 22:00 | 3370702 DirkDiggler11
DirkDiggler11's picture

I foresee a significant uptick in the "suicide" rate among Cypriotic politicians and members of the Troika. This time the Russians will do than go thru Lagarde's panty drawer....

Long - Suicide Notes and Heavy Metals

Short - European life insurance companies

Sun, 03/24/2013 - 23:23 | 3370998 bsdetector
bsdetector's picture

Actually, no. The parliamentarians tried their best to protect the big depositors with a less than 10% haircut. Now the big depositors will lose much more of their uninsured deposits. The government of Cyprus would not initially seek approval from the Troika for plan A unless there was political support at home. The Cypriot officials chickened out when this went public. The Troika must be furious that it looks like Plan A was their own creation because it harmed the citizens of Cyprus more than the present resolution. I say kudos for the Troika. Now Ollie and the rest of them should go public and explain to the average Cypriot how their elected officials were about to sell out to the big depositors. That is the reality of this whole situation. It is too bad that Elizabeth Warren was the only voice in the US that spoke out about the way the US financial system benefited at the expense of everyone else. Our elected officials with the assistance of unelected officials sold us out.

Sun, 03/24/2013 - 23:50 | 3371036 Assetman
Assetman's picture

The Troika should have never entertained the idea of a depositor levy at the very start... just should have rejected it outright as it affected insured depositors.

I believe those in trouble in the Cypriot government should be all those who decided to abstain from their votes... those were essentially the 'yes' men that would have thrown their insured depositors under the bus.

Mon, 03/25/2013 - 00:04 | 3371091 bsdetector
bsdetector's picture

Those in government were not yes men- I'd suggest they were bought and paid representatives of the elites just like 99% of the elected representatives in the US. They should all be hung out to dry for this event.

Sun, 03/24/2013 - 22:00 | 3370705 lolmao500
lolmao500's picture

Fucking traitors...

Sun, 03/24/2013 - 22:01 | 3370710 thewayitis
thewayitis's picture

   HEAR COME THE RUSSIANS ........Ahhhhh

Sun, 03/24/2013 - 22:02 | 3370715 HowardBeale
HowardBeale's picture

Fiddling while Rome burns. These fuckers are more delusional than the most extreme psychopathic humans that have ever lived, during the long history of delusional fucks. 

I predict everyone we have seen in this farcical charade will lose his/her head--literally--within the very near future. 


Just picture bloody bursts of breath rising from meaty shredded necks that once supported overgrown heads...

Sun, 03/24/2013 - 22:04 | 3370721 jubber
jubber's picture

Asian markets not appearing to be drinking the Koolaid ,well off that spike high

Sun, 03/24/2013 - 22:05 | 3370726 Dazman
Dazman's picture

I love how they call it "hair cut". It's not a hair cut... it's theft!

Sun, 03/24/2013 - 22:06 | 3370736 Everybodys All ...
Everybodys All American's picture

When bond and stock holders are not affected you are exactly right.

Sun, 03/24/2013 - 22:47 | 3370866 Dazman
Dazman's picture

Well I guess the bond and stock holders for Laiki do get wiped out.

But that it will spill over to depositors over $100k is because the money is not based on a gold or other backed standard. In a non-fiat system that money wouldn't even be there without it being backed by something in the first place.

Sun, 03/24/2013 - 22:07 | 3370737 ziggy59
ziggy59's picture

Yes, Its a little short,, no? Decapitation is more accurate but that restores the meme of guillotines into these people.

Sun, 03/24/2013 - 22:53 | 3370890 FeralSerf
FeralSerf's picture

"Theft" is such a nasty word.  It implies someone is stealing and stealing is illegal.  Hair cuts, however, are a normal thing to get when one's hair has grown out too much.  They're done by the old and somewhat honorable profession, the barbers (made famous by Rossini).  What would you rather get, someone robbing you or your sideburns trimmed?


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