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Cyprus Bank Heist: A True Game-Changer

Near-term risks include domino-like bank runs & capital cont
Monday, March 18, 2013, 12:29 AM
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This weekend on 3/16/13, under pressure from IMF bankers and a push from German politicians, a Cyprus bailout deal was approved that would take the bulk of the bailout fund from the private bank accounts of Cyprus bank depositors.  Yes, you read that right; savers were determined to be the logical target to bail out the profligate.

The reaction from depositors, predictably, was intensely negative.  They are furious and shocked.

This is a complete game-changer.  It means that even money in the bank is not safe.  It implies that money in pension and money market accounts is not safe, either.  It means that rule of laws and contracts really don't matter.  Of course, MF Global taught us that.  It finally means that trust is no longer a part of the equation... 

 

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