Ewing, J. (2015) “As Cyprus Recovers From Banking Crisis, Deep Scars Remain“, The New York Times: International Business, 16 Μαρτίου.
The financial world has pretty much moved on since Cyprus was briefly the epicenter of market anxiety.
Two years ago this month, the country’s banks failed en masse, A.T.M.s were rationing cash, and the integrity of the eurozone hung in the balance. But after a contentious, internationally brokered “bail-in,’’ in which for the first time many bank depositors were forced to help pay for a eurozone rescue, Europe’s policy makers soon found other things to focus on.
Yet Christos Savvides, managing director of an advertising agency in Nicosia, the once booming capital, does not have the luxury of forgetting. Daily reminders include the rows of downtown shops that once sold luxury clothing brands but now stand empty. At one defunct auto dealership, a Renault Laguna sedan, in a thick layer of dust, is still on display behind dirty windows.
Mr. Savvides lost hundreds of thousands of euros that he had deposited in Cyprus banks — money seized in the rescue program to cover bank losses. Two years later, Mr. Savvides’s experience, and that of tens of thousands of other Cypriots caught up in the crisis, offers lessons that could soon apply to Greece if that country is unable to reach agreement with its creditors.
In retrospect, it is clear that European leaders, international creditors and bank regulators could have done more to limit the economic upheaval caused by seizing portions of depositors’ money above the level of 100,000 euros covered by deposit insurance, a threshold equivalent to roughly $105,000 at the current exchange rate.
In fact, a new European Union law written after the crisis would probably have exempted Mr. Savvides, since the deposits in his case actually belonged to his clients. But that law comes too late for him and other Cypriots.
One surprising lesson may be that capital controls — restrictions on withdrawals and on money transfers out of the country — were not as disruptive as feared, but did help prevent even more money from leaving Cyprus. If anything, some economists say, the restrictions should have been applied sooner, before many of the biggest and most sophisticated investors had already fled. More recently, foreign money has been trickling back into Cyprus, including a big bet by Wilbur L. Ross Jr., the American investor known for his appetite for tough cases.
Σχετικές αναρτήσεις:
- Davíðsdóttir, S. (2015) “Cyprus and Iceland: a tale of two capital controls“, A Fistful of Euros – European Opinion Blog, 06 Μαρτίου.
- Michaelides, Al., (2014), “Cyprus: from boom to bail-in”, Economic Policy, Vol. 29, Issue 80, pp. 639-689.
- Hardouvelis, Gikas (2014), “Overcoming the crisis in Cyprus”, Economy & Markets, Vol. IX, Issue 1.