The Botching of the Cyprus Bailout: Worse Than Lehman Brothers
[T]hey have opted for a “solution” that amounts to probably the single most inexplicably irresponsible decision in banking supervision in the advanced world since the 1930s.
Boldfaced red emphasis added by me.
This now threatens a real contagion:
As my colleague Tim Worstall has pointed out in a well argued contribution yesterday, they have weakened – perhaps catastrophically – the principal pillar sustaining modern banking. This pillar is deposit insurance. Ordinary savers who had received a solemn assurance that deposits up to 100,000 euros were safe are now being asked to take a haircut. This raises questions about deposit insurance throughout the EU and invites runs on banks not only in the most “financially-challenged” nations such as Greece and Spain but even in Italy and France.
Boldfaced emphasis added by me.
There probably won’t be a single Cypriot banker arrested on any charges.
They bought shit in a fit of greed and dumped it on everyone else.
If this doesn’t tell you that finance has turned into a racket, what will?
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