Saxo Bank CEO: Blame The Euro, Not Cyprus

Tyler Durden's picture

Authored by Lars Seier Christensen, CEO Saxo Bank via his blog,

The real problem is not Cyprus, it is the Euro.

After a few disturbing weeks, I would like to wrap up my comments on Cyprus and, hopefully, turn to other issues going forward. It is astonishing that a EUR 10 billion bailout can keep the world spellbound for so long. But then again, while the amount is not staggering, some of the implications are mind-blowing.

That a small economy can be destroyed over a weekend is in itself very scary. But Cyprus's fate was basically sealed when the Troika revealed its first version of the bailout package. That the final outcome turned out to become even worse should not surprise anyone following the Euro zone's past efforts at saving its project. There is no coherent line, no apparent co-ordination of statements and the grand plans bear the impression of having been scribbled on a napkin long after bedtime. The results are accordingly: poor.

So did Cyprus do terrible things that made it deserve this gruesome fate? Actually not. Cyprus had respectable numbers both for growth, public debt and finances - certainly compared with many other countries in the region. Cyprus succesfully built a strong financial services sector, as the island has little industry or agriculture to live from. Cyprus has a well-functioning, English-speaking workforce and has based itself on British law. So all in all, not a bad place to do business. It made the most of what they had to offer.



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Stuck on Zero's picture

Why is that the cause of the crisis was handing out trillions in debt to the poor?  Maybe the real cause was giving trillions in cash to the rich.


toys for tits's picture

The problem wasn't Cyprus, but now thanks to the Troika, Cyprus has got huge problems.

The Cypriot politicians had a chance to save its major industry, but instead fucked its citizens.

The amount of suffering will be sad to watch.

Pinto Currency's picture


Saxo Bank is one of the most leveraged banks out there.

Now their CEO has found god.

smlbizman's picture

we will still need rope, yes?

the tower's picture

This "article" is clearly an infomercial. Also on ZH you have to use your brain to find some real information, no different from MSM.

williambanzai7's picture

It is an infomercial. However, there is truth in what he is saying.

The critical link he leaves out, rather conveniently, is the financial overlords who enabled their political muppets to implement the failed EURO framework in the first place. A framework likened to hitting the bankster financial jackpot.

Those were not the proles or the petty bourgeous.

Pinto Currency's picture


The issue is debt based fiat money, central banking and the parasitic banks like Saxo Bank that feed off this arrangement.

Urban Redneck's picture

Two sides of the same coin that the politicians don't earn or own, but yet feel free to dispense in order to maintain their own comfortable positions-

The Heart's picture

The Law of Cause and effect. Also known as, Karma.

The jump to the brics currencies is happening faster now and the push to create a distraction is heated more than ever. The banksters raveled their evil plans to quicken the demise of all paper fiat currencies for a digital sdr type world currency. Everybody knows the euro is dead and is jumping the ship now while they can. Everybody knows the insane-asylum American leadership is determined to ram the ship aground and then scuttle her and the crew, so they are betting on the winners of WW III. Kinda funny how that works. We see that there is no stopping this insane money god scamery at all. People bet on a future that is non-existent. At the rate this ship is headed towards those rocks the banksters are driving hard against the winds to, she won't last long. And even though the babylonians are doing this killing of the dollar and euro in synch with the warmongering, distractions, false flag events, and other assorted 'war by deception' tactics from that romper room box, there is still hope to stop this insanity before some clown pushes a button of no-return.

ANYONE that thinks they will escape the holocaust that follows even one nuklear weapon being discharged ANYWHERE on the planet, is a total stupid fool. Ignorance will be the death of many. What effects the one, WILL absolutely effect the all. Get that and make your bets accordingly. There is still enough time to save America from the onslaught of chaos and a potential two front world war that she is being set up like bowling ball pins to be knocked down to lose. NOW HEAR THAT! And know this, there is NO ESCAPE from the cause and effects of more world war.


desoto's picture

We all determined that months ago.  We are just waiting for "Southern Europena States" to recongnize that fact and DROP the damn currency.  Rise up Europeans before you all become debt slaves!!!

nmewn's picture

Pretty much dead on...this was scribbled by a banker?

nuinut's picture

With all due respect, I think this is pretty much dead wrong, and that the entire situation is being looked at through the wrong lens.


The real problem is not Cyprus, it is the Euro….The one thing that went wrong for Cyprus was its bankers expecting that Euro zone politicians could be trusted to pay back their loans.- Saxo CEO

Hang on, is the problem the euro or the euro zone politicians? They are not one and the same, and this appears to me to be where the confusion arises. People seem to think the politicians have some sort of influence over the currency.

They don't, and that is a very, very good thing.

It is the first currency that has not only severed its link to gold, but also its link to the nation-state. It is not backed by the durability of the metal or by the authority of the state. - former ECB head Willem Duisenberg.

As far as the currency goes, the ECB have only a single mandate: price stability. A target of just under 2% against the CPI.

People don't appreciate this severed link to the state, and what it implies.

…all the troubles could only have been built into the system with the Euro zone dynamics in place… the problems grew much bigger than free capitalistic markets would ever have allowed. - Saxo CEO


Which "free capitalistic markets" are these, pray tell? Completely dismiss the rest of my comment, but please answer me that... where are these "free capitalistic markets"? They don't exist, and the reason they don't exist is due to state intervention (you may know it better as "socialism").

Severing the link between the currency and the state neuters socialism, so people have to return to being responsible for themselves (and then you have "free capitalistic markets", for the first time since waaaaay back).

There will be immediate term pain as socialism is by necessity scaled back throughout the eurozone.

And then we'll see just what "free markets" can deliver.

The state is going to fuck all the other currencies because they can, in their quest to keep the troughs full and themselves in a job.

Euorpean politicians will be regularly turned over while the Europeans relearn how to provide for themselves... lesson number one: don't assume your money is safe in any old bank. As long as it remains stable, the euro currency is functioning just fine, but folks will in future need to perform a little more due diligence with regard to who or what they entrust its safekeeping to.

The fact that the euro is not like other currencies with regard to the state is extremely relevant to how the future will unfold.

There is a lot to think about with regard to this overlooked little detail, and it throws new light upon all sorts of things that otherwise don't make sense.


Just my 2cents.

A fundamental oversight in one's premises can skew things 180.


TBT or not TBT's picture

The euro allowed piigs countries to borrow at low spreads to more serious countries like Germany, whereas the history of these and other countries was dodgy, credit wise, up till then They went on a borrowing binge, on the cheap, thanks to the politically decided politically forced project called the euro. The dodgyness of these countries and other serial currency devaluers proved out, and a trillions in bad debt were added to the unfounded gigapension schemes that are the dozens of doomed nanny states over there. It is all going down, faster, thanks to the euro experiment.

nuinut's picture

I agree, they did go on an unwise binge.

However, if you wanna dance, you gotta pay the band.

The pension funds and nanny states are doomed, but not the currency. Procedurally, leaving is not possible. 

It had to go down anyway, sooner or later, wouldn't you agree?

The point is, with no state authority over the money, it will be qualitatively different coming back up.

No more socialism, just actual capitalism.


Ghordius's picture

The EUR... or... markets?

"The euro allowed piigs countries to borrow at low spreads to more serious countries like Germany..."

I remember something about banks lending - and many, many bond brokers, and lots of very bright people...

imho it's a fact that the european continent is often quite misunderstood, in Anglo American financial publications - often on purpose, sometimes just on the assumption that it's "something like the US"

I made a longer argument on this here, where Ron Paul (honestly) mistakes 1 banking system with 17 banking systems

Voluptuarius Catus's picture

1)      An absolutely brilliant book, a must read, by Bernard Lietaer et al Money and Sustainability – the Missing Link, a Report from the Club of Rome – EU Chapter. The below 2 examples are from this book:


1 cent borrowed by J Caesar @4% in (52BC) now would compound interest equal to approximately 2000 gold balls each weighing as much as the Earth, at current price of gold. Had the interest been compounded @5% instead of 4%, several trillion gold balls would be needed to pay his debt 2 millennia later. This debt would have been defaulted many times over. (at p 100)


10 households in a village, producing different things and exchanging them (bread, shoes, meat etc.). Comes a guy in shiny shoes and says, let me make your exchange more efficient, here, you all get 10 tokens, but by the end of the year each of you will have to give me back 11. So people ask, but where 11th is going to come from? He says, you’ll see. Assuming the same physical production in the village, the 11th token would need to…


2)      Nietzsche said that no winner will ever admit his luck…


3)      IMHO

·         Communism and Free enterprise have remarkably similar ideals at heart (utopias, if you will): to all according to their labour and from all according to their ability OR work hard in a tough and competitive space and enjoy the fruits of your labour. Question: Why are there endless conversations about crony capitalism and socialism, both totalitarian in nature and similar in effect on society, their labelling and classification etc., instead of a constructive discussion on how to from now (remember, the funny thing is all agree on the destination without realising it) – a nice big bone to keep a tiny dog occupied?

·         Usury: interest on interest, exponential growth assumption is the real culprit of our problems (War with Islam anyone?). After being amazed by the “balls” example, we go back to the village example. Who is punished with the 11th token? The one who is weaker positioned/ unlucky. So before the tokens, those ppl in the village helped each other, say, when a barn burned etc., thereafter everyone was for oneself. The village has to produce more automatically: so, say, if the guy in shiny shoes is benevolent, then obviously the extracted 10 tokens will go to the guy whose barn burned, but I doubt this is the case… Also, without the tokens, this barter system actually worked fairly anyway (in terms of helping) = so gov is a legitimate societal tool (see below) actually, but if these 10 tokens are redistributed from the poorest and weakest or unlucky (oh, yes, they will be damned, they cannot complain!) to the guy with the invention sitting back how stupid is this? All inventions at first luxuries become everyday things, returns normalise and businesses become boring utilities… Question: Who should benefit from utilities, like banks, energy-generating firms etc., isn’t there a trade-off invention vs large scale usage? Question: Why are there monopolies which benefit only the select few, who selected them if there is large scale usage? Question: Why are there homeless people if there is enough sunshine for everybody? Question: What is so wrong the simple interest?

·         Government is an absolutely legitimate institution (imagine a bigger village); modern governments (corrupt etc.) actually borrow at exorbitant rates while at the same time giving legitimacy to fiat currencies (i.e. by requiring collection of taxes in those currencies) = establishing the legal tender status. Question:  Whom does seigniorage benefit and why it does not benefit the people? Question: Why is there so much anti any government shrill in the media smelling very much like divide and conquer quest?

4)      My question re EURO:  whom does it benefit? Why is there such austerity? It looks like the national link that it severed was to protect powerful interests! How else, besides Spanish and Greek unemployment as well as the destruction of the Cypriot financial sector, EURO is going to influence the lives of the ordinary European people, the real economy?

StarTedStackin''s picture

First EU country to openly bail is the smartest in my book.......




It's like the first rodent who sees that the ship is going under, or maybe one of the last who uses the carcass of a neighbor for a raft right before.....

morning's picture

It is 1975. Portuguese communist coup mastermind army Cpt Carvalho tells then Swedish PM that Portugal took a huge step forward in getting rid of the rich. The swede replied that his country preferred to become rid of poor. Carvalho failed to get the point.

essence's picture

The ROT lies (primarily) at the top. Same as it ever was.

People .... your leaders betray you ('cause they themselves sold out to the big money beyond even them)


LeisureSmith's picture

Dystopia is the new utopia. Will the true believers ( Barroso et al.) ever have a crisis of faith, are they failing or is this all going acording to plan? I say fuck'em either way.

holdbuysell's picture

"The one thing that went wrong for Cyprus was its bankers expecting that Euro zone politicians could be trusted to pay back their loans."

Trusting politicians.

Now that's funny.

Non Passaran's picture

That was a reasonable thing to do.
After all, they paid them and expected them to do as told...

are we there yet's picture

How to build a French Guillotine.

You do not have to use it, just have it sitting in French town squares near central bank offices cutting cabbages.

JR's picture

Capital controls are the first move of a totalitarian government to take private property for the benefit of the ruling usurpers. Bernanke started it with ZIRP.

The overwhelming disillusionment of America’s true, productive middle class – not the 98% of the population Obama rounds off as “middle class” to suit his own nefarious political purposes –  came when the bankers took not only their savings with impunity but came for their homes. Americans’ homes are their primary source of wealth.

And Wall Street, with the blessings of its bought hirelings in D.C., turned the life’s work of America’s very best into risk, into investment playthings for the investment bankers. And those Wall Street gamblers extracted $17.5 trillion or 25.5% of those households’ net worth from 2007 to 2009. This was the equivalent loss of one year of GDP.

And, this, came after the bankers used a 401(k) ruse to discontinue long standing company pensions in the private sector, at the same time off-shoring well paying middle class jobs in skilled manufacturing and management to low-wage Third World operations.

Now, Robert Rubin and Obama are opting for the middle class’s social security trust funds, and to herd them into some kind of down-graded, cattle-corral health care system to receive medical care, at massive cost, as men of greed and corruption seek profit from the work of others who built a health care system the envy of the world.

To destroy is easy; to build is hard.

pashley1411's picture

The subtext is that if you chose to bank in a country where the banks were forced to pile up dodgy sovereign bonds, you are dancing with the devil.

Of course that's most of them, isn't it?

smacker's picture

Agree with the conclusion.

Whilst very many people blame the bankstas for the euro crises, far too few blame the political elites.

But above all the euro was a political construct built to fulfil a political dream and create a new empire: EUSSR.

But it was built on sand and is now sinking into the sunset (I hope).

Along the way, many millions of people have had their taxes raised to pay for bailouts, future generations will be born into debt, lives wrecked and savings stolen. The cost has been enormous.

The euro is an unmitigated disaster. The political elites need and must be held to account for it. It was their idea, nobody else's.

feruap's picture

Why they just dont devaluate as Japan did to incentivate the productivity based on exchange rate? Besides in Japan they dont have a big inflation vs. devaluation... Can some body explain me?

sitenine's picture

That's actually pretty easy. Assets are WAY WAY over valued. Unfortunately, debt is written against the assets. If the assets loose value, which they must, because they are over valued, then the debt goes bad. The 'inflation' that the Yen demolishing is creating isn't keeping up with peoples realization that asset prices are WAY WAY over valued. The same basic thing is also happening in the US and in Europe. So the more fiat that is printed, the more asset prices try to levitate, but gas, food, necessities are all going through the fucking roof in the long run. When you ask about inflation it is important to keep in mind whether you are talking to a common folk or a 'person' that owns debt backed by assets. Call it biflation if you like. You also have to realize that Japan is an export nation. The more they can crush the Yen, the more they can export.

feruap's picture

Could biflation wxist in Europe aswell... Germany is an export country

feruap's picture

Could biflation exist in Europe aswell?... Germany is an export country

Non Passaran's picture

Because they don't have their own currency?

Notarocketscientist's picture

How do you devalue when everyone else is devaluing?

SoundMoney45's picture

Cyprus got Euroed.

Spain got Euroed.

Portugal got Euroed.

Italy got Euroed.

France got Euroed.

Next we get to watch the Netherlands and Germany get Euroed.

At this point, only a fool would place a significant portion of their wealth in a Eurozone bank.  

d_taco's picture

Do not wory FDIC and BofE working together on the same template. And they have a surpice solution for your gurantee funds. I do not tell you now otherwice I spoil the surpice party.

Citi Mr Buiter bank) try desperately to move 20 Milj bad debpt from there balance sheet:

You must be a ful to believe the (bloomberg) US is doing so much better.

d_taco's picture

With this kind of nonsen they should not allow to run banks.

The Cypriotic Banks did not have the money anymore because Greece could not pay it back. The Cypriotic banks could not see the risk they took with other peoples money. They thought that no matter how much they blow away, other countries can alway's pay back.

If they do not have the Euro they could default by devaluate like the US and Japan.

The Euro is serious money (unless what anglo saxon media tells you) and if you can not handle serious money go back to your phony money

FunkyOldGeezer's picture

Why do rich people think THEY have a God given right to keep hold of their wealth? Most of them would have 'robbed' the working classes of the world, in one way or another, to acquire their wealth, so this is just the same old same old, except it's actually more open and transparent.

d_taco's picture

Yes the muppets on Zerohedge are right.

There is no blame on the bankers and investors (read depositors). It is all because the politician do not give us the money. And it is beacause the Euro because the Euro is stupid.


css1971's picture

Euro = Economics (weaponized)