Coming To Your Bank Account Soon - THEY Take 10% by 'Law'......

[Magda Hassan]

Cyprus eyes 25 percent levy on big savers at stricken Bank of Cyprus

NICOSIA | Sat Mar 23, 2013 7:45am EDT

(Reuters) - Cyprus is considering a levy of about 25 percent on bank deposits over 100,000 euros ($130,000) in the island's largest local lender, Bank of Cyprus, Finance Minister Michael Sarris said on Saturday.
Sarris told reporters that "significant progress" had been made in talks with officials from the European Union, European Central Bank and International Monetary Fund - the so-called 'troika' - and that the discussions may conclude on Saturday evening.

($1 = 0.7694 euros)http://www.reuters.com/article/2013/03/2...4320130323

[Jan Klimkowski]

The Russians will retaliate.

Perhaps by multiple means.

Maybe Angela Merkel and Christine Lagarde will start glowing radioactively at an international summit....

Cyprus bailout: Kremlin 'could punish Europe' in reprisal for bank levy

Fears mount that Russia could act against European companies if charge on deposits hits €30bn Russian investments

Helena Smith in Nicosia, Simon Goodley and Toby Helm
The Observer, Saturday 23 March 2013 19.20 GMT
Jump to comments (689)

A Russian gas pipeline: a Cyprus bailout levy is unlikely to include a gas cut-off
A pressure valve on a Russian gas pipeline: any retaliation by Russia for a Cyprus bank deposit levy is unlikely to include cutting off gas supplies, according to a former Kremlin adviser. Photograph: Sergei Supinsky/AFP/Getty Images

Fears are growing of Russian reprisals against European businesses as EU authorities desperately seek a deal to save the Cypriot economy by imposing a 25% levy on bank deposits of more than €100,000.

As the island scrambled to put together a rescue programme, its finance minister, Michalis Sarris, said "significant progress" had been made on the latest levy plan in talks with officials from the European Union, the European Central Bank and the International Monetary Fund.

The government in Nicosia faces a deadline of Monday to reach an agreement or the European Central Bank says it will cut off emergency cash to the island, spelling the likely financial collapse of its banking system and a potential exit from the European single currency.

However, with Russian investors having an estimated €30bn (£26bn) deposited in banks on the island, the growing optimism about a deal was accompanied by fears of retaliation from Moscow. Alexander Nekrassov, a former Kremlin adviser, said: "If it is the case that there will be a 25% levy on deposits greater than €100,000 then some Russians will suffer very badly.

"Then, of course, Moscow will be looking for ways to punish the EU. There are a number of large German companies operating in Russia. You could possibly look at freezing assets or taxing assets. The Kremlin is adopting a wait and see policy."

Nekrassov rejected suggestions that Russia might hit back by cutting off gas supplies, a tactic the country used in 2009 after the collapse of talks with Ukraine to end a row over unpaid bills and energy pricing.

"Gas is no longer a weapon," Nekrassov said. "When Russia did that before, it realised that the foreign energy lobby reacted and efforts to find alternative sources were increased. If Russia kept threatening, it knows that nobody would be buying its gas in 20 years' time."

Mike Ingram, an analyst at City broker BGC Partners, said: "In Russia, historically, if they want an asset they just grab it. If they want cash out of a [EU] business [in Russia] they just create a tax bill or raid offices and make your life unpleasant. They could also make life difficult diplomatically on issues such as Syria. They might also rattle a few sabres over deployment of the missile defence system."

In a week of high-stakes brinkmanship, the EU, ECB and IMF the so-called "troika" behind the rescue of five southern European countries had refused to budge on its insistence that Cyprus raise €5.8bn of its own revenues to qualify for the bailout aid.

The latest levy plan reflected Nicosia's fast-dwindling options.

Last week Cypriot MPs overwhelmingly rejected a similar levy proposal even after it was adjusted to remove any charge on savings below €20,000 triggering a week of tumult as Nicosia tried and failed to win financial support from Russia instead.

The tax on savings is unprecedented in Europe's handling of a debt crisis that has spread from Greece to Ireland, Portugal, Spain and Italy. The crisis has reignited uncertainty about the future of the eurozone just as many EU leaders began to believe the worst was over for the single currency.

On Saturday, uncertainty shrouding the island turned from unease on the streets, where people have rushed en masse to withdraw money from cash machines, to scenes of panic-buying.

The inept handling of the crisis by politicians has exacerbated a dark mood with many Cypriots fearing that they stand to lose life savings following the government's decision to also raise funds by restructuring Laiki, the island's second biggest bank.

Marios Panayides, 65, a protester outside the Cypriot parliament said: "Our so-called friends and partners sold us out. They have completely abandoned us on the edge of an abyss."

Retailers, facing cash-on-delivery demands from suppliers, warned stocks were running low. "At the moment, supplies will last another two or three days," said Adamos Hadijadamou, head of Cyprus's Association of Supermarkets. "We'll have a problem if this is not resolved by next week."

Cypriots fear the damage the levy would do to the country's offshore banking industry. Much of the Cypriot banks' capital was wiped out by the collapse of investments in Greece, the epicentre of the euro zone debt crisis.

[Magda Hassan]

The Russians will retaliate.

Perhaps by multiple means.

Maybe Angela Merkel and Christine Lagarde will start glowing radioactively at an international summit....

Cyprus bailout: Kremlin 'could punish Europe' in reprisal for bank levy



Retailers, facing cash-on-delivery demands from suppliers, warned stocks were running low. "At the moment, supplies will last another two or three days," said Adamos Hadijadamou, head of Cyprus's Association of Supermarkets. "We'll have a problem if this is not resolved by next week."

Hungry people are very angry people.

[Peter Lemkin]

The Russians will retaliate.

Perhaps by multiple means.

Maybe Angela Merkel and Christine Lagarde will start glowing radioactively at an international summit....

Cyprus bailout: Kremlin 'could punish Europe' in reprisal for bank levy



Retailers, facing cash-on-delivery demands from suppliers, warned stocks were running low. "At the moment, supplies will last another two or three days," said Adamos Hadijadamou, head of Cyprus's Association of Supermarkets. "We'll have a problem if this is not resolved by next week."

Hungry people are very angry people.

The 'developing world' has always been angry. Now, we find growing anger among the average citizens of the 'developed' world.....its gonna be a fun next few years....those who rule [or think they do] are in for a very tough time....ditto the average person! A nice game of Class Warfare, anyone?

[Jan Klimkowski]

SHOCK HORROR - Banker tells the truth!

Markets crash.

Eurogroup's Dijsselbloem Says "Banks Should Save Themselves"

Submitted by Tyler Durden on 03/25/2013 12:05 -0400 Zero Hedge


The by-now infamous Dutch FinMin Jeroen Dijsselblom - and head of the Eurogroup of finance chiefs - made some fascinating comments this morning with Reuters and the FT that are changing the shape of European markets rapidly. From banks need to save themselves to forcing "all financial institutions, as well as investors, to think about the risks they are taking on because they will now have to realize that it may also hurt them," he is making a lot of sense - though we suspect Mr. Draghi will not be amused as his 'promise' looks like being tested. Simply put, Dijsselblom is saying that a balance sheet can be 'normalized' not only by boosting assets (courtesy of the ECB) but by collapsing liabilities (or remarking bad loans to market) - something that no one in power has admitted to date. While this is upsetting to markets - so used to the visible hand of central planning saving themfrom themselves - this is very positive step for 'real people' as taxpayers appear to be 'off the hook' and the responsible parties beginning to be punished.

Via Bloomberg:
Dijsselblom's direct quotations in the interview were confirmed by his spokeswoman, Simone Boitelle.

"What we've done last night is what I call pushing back the risks," Dijsselbloem says in the interview



"If there is a risk in a bank, our first question should be Okay, what are you in the bank going to do about that? What can you do to recapitalize yourself?'. If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders," he says



"If we want to have a healthy, sound financial sector, the only way is to say, Look, there where you take on the risks, you must deal with them, and if you can't deal with them, then you shouldn't have taken them on,'" he says



"The consequences may be that it's the end of story, and that is an approach that I think, now that we are out of the heat of the crisis, we should take," he says



"It means deal with it before you get in trouble. Strengthen your banks, fix your balance sheets and realise that if a bank gets in trouble, the response will no longer automatically be that we'll come and take away your problem. We're going to push them back. That's the first response we need. Push them back. You deal with them," he says



"We should aim at a situation where we will never need to even consider direct recapitalization," he says



"If we have even more instruments in terms of bail-in and how far we can go on bail-in, the need for direct recap will become smaller and smaller," he says



"I think the approach needs to be, let's deal with the banks within the banks first, before looking at public money or any other instrument coming from the public side. Banks should basically be able to save themselves, or at least restructure or recapitalise themselves as far as possible," he says



"Now we're going down the bail-in track and I'm pretty confident that the markets will see this as a sensible, very concentrated and direct approach instead of a more general approach," he says



"It will force all financial institutions, as well as investors, to think about the risks they are taking on because they will now have to realise that it may also hurt them. The risks might come towards them," he says

The truth lasted about three hours and a market crash as people started behaving rationally.

Now the lies, and the irrationality, are back in.

Eurogroup Head Says He Did Not Say What He Said

Submitted by Tyler Durden on 03/25/2013 13:56 -0400 Zero Hedge

That thing Diesel-BOOM very, very clearly said earlier? He did not say it. After all, can't have the market getting any ideas that reality may be slowly coming back to the basket case that is Europe:

EU DIJSSELBLOEM SPOKESWOMAN: DIJSSELBLOEM DIDN'T SAY CYPRUS A TEMPLATE FOR BANK RESTRUCTURINGS - DOW JONES

So not only are European depositors still impairable, because sadly Dijsselbloem was dead serious in his Reuters interview, but the new Eurogroup head pulled a Juncker and confirmed "it is serious" in the process losing all credibility too.

To summarize Diesel-BOOM: "If the market is red, you have to lie."

Forget Risk-On-Risk-Off, it's Template-On-Template-Off now...

His subsequent official clarifying remarks on the Eurogroup's website:

Statement by the Eurogroup President on Cyprus



25/03/2013 - Statement



Cyprus is a specific case with exceptional challenges which required the bail-in measures we have agreed upon yesterday.



Macro-economic adjustment programmes are tailor-made to the situation of the country concerned and no models or templates are used.

[Jan Klimkowski]

Does keeping the bank doors closed make any difference to electronic transfers out to other safe havens?

"Toto, I've a feeling we're not in Kansas anymore."

Maybe the Yellow Brick Road goes to Moscow....

Yep - the crooks of the IMF and Bundesbank have lost out to the crooks of Russia.

The oligarchs' filthy lucre is GONE!!!!!

Have The Russians Already Quietly Withdrawn All Their Cash From Cyprus?

Submitted by Tyler Durden on 03/25/2013 17:00 -0400
Zero Hedge

Yesterday, we first reported on something very disturbing (at least to Cyprus' citizens): despite the closed banks (which will mostly reopen tomorrow, while the two biggest soon to be liquidated banks Laiki and BoC will be shuttered until Thursday) and the capital controls, the local financial system has been leaking cash. Lots and lots of cash.

Alas, we did not have much granularity or details on who or where these illegal transfers were conducted with. Today, courtesy of a follow up by Reuters, we do.

The result, at least for Europe, is quite scary because let's recall that the primary political purpose of destroying the Cyprus financial system was simply to punish and humiliate Russian billionaire oligarchs who held tens of billions in "unsecured" deposits with the island nation's two biggest banks.

As it turns out, these same oligrachs may have used the one week hiatus period of total chaos in the banking system to transfer the bulk of the cash they had deposited with one of the two main Cypriot banks, in the process making the whole punitive point of collapsing the Cyprus financial system entirely moot.

From Reuters:

While ordinary Cypriots queued at ATM machines to withdraw a few hundred euros as credit card transactions stopped, other depositors used an array of techniques to access their money.



No one knows exactly how much money has left Cyprus' banks, or where it has gone. The two banks at the centre of the crisis - Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus - have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia's Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks' largest depositors.

So while one could not withdraw from Bank of Cyprus or Laiki, one could withdraw without limitations from subsidiary and OpCo banks, and other affiliates?

Just brilliant.

And if there was any doubt that the entire process of destroying one entire nation was simply to punish Cyprus, it can be completely cleared away now:

ECB officials contacted Latvia, another EU country that has received large Russian deposits, to warn authorities against taking in Russian money fleeing Cyprus, two sources familiar with the contacts said.



"It was made clear to our Latvian friends that if they want to join the euro, they should not provide a haven for Russian money exiting Cyprus," a euro zone central banker said.

If one thinks there is any material Russian cash therefore left in Cyprus with this epic loophole in place, we urge them to make a deposit in the insolvent nation. One person who certainly will not be allocating any of his money into Bank of Cyprus is German FinMin Schaeuble:

German Finance Minister Wolfgang Schaeuble said the bank closure had limited capital flight but that the ECB was looking closely at the issue. He declined to provide figures.

Perhaps because if he did, it would become clear that the only entities truly punished by this weekend's actions are not evil Russian billionaires, but small and medium domestic companies, and other moderately wealthy individuals, hardly any of them from the former "Evil Empire."

Companies that had to meet margin calls to avoid defaulting on deals were granted funds. Transfers for trade in humanitarian products, medicines and jet fuel were allowed.

The stealth withdrawals by Russians of course means that the two megabanks are now utterly drained of capital, and that the haircuts on those who still have unsecured deposits with the two banks will be so big it will likely mean a complete wipeout of all deposits. As in 0% recovery on your deposits!

In other words, by now any big Russian funds in Cyprus are long gone, and the only damage accrues to the locals: for one reason because their money over the critical EUR100K threshold has been "vaporized", and for another because the marginal driving force and loan demand creator in Cyprus, the Russians, are gone and are never coming back again.

This is what passes for monetary real-politik in the New Normal - an entire nation becomes collateral when pursuing a wealthy group of people. And the "wealthy group" is victorious in the end despite everything...

If we were Cypriots at this point we would be angry. Very, very angry.

[Magda Hassan]

Does keeping the bank doors closed make any difference to electronic transfers out to other safe havens?

"Toto, I've a feeling we're not in Kansas anymore."

Maybe the Yellow Brick Road goes to Moscow....

Yep - the crooks of the IMF and Bundesbank have lost out to the crooks of Russia.

The oligarchs' filthy lucre is GONE!!!!!

No one knows exactly how much money has left Cyprus' banks, or where it has gone. The two banks at the centre of the crisis - Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus - have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia's Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks' largest depositors.

So while one could not withdraw from Bank of Cyprus or Laiki, one could withdraw without limitations from subsidiary and OpCo banks, and other affiliates?

Just brilliant.

:joystick: Gee, I bet no one saw that coming....

ECB officials contacted Latvia, another EU country that has received large Russian deposits, to warn authorities against taking in Russian money fleeing Cyprus, two sources familiar with the contacts said.

"It was made clear to our Latvian friends that if they want to join the euro, they should not provide a haven for Russian money exiting Cyprus," a euro zone central banker said.

And the advantages of being in the EU are what exactly? For those other than German bankers that is.

If we were Cypriots at this point we would be angry. Very, very angry.

With 2 days left of food in the shops we will soon be seeing quite how angry they can be.

[Magda Hassan]

A Word Out Of Place Sends Europe Tumbling

Submitted by Tyler Durden on 03/25/2013 11:07 -0400


Perhaps the best example of a "word out of place" comes from the new Eurogroup head, Dijsselbloem, also phonetically known as Diesel-BOOM, who just may have ushered in the next, next wave of the Eurozone crisis:

• "Cyprus a Template For EU"
  

Er... wasn't it a special case, inside a unique case, wrapped in a one-time case? We will ignore the rather hilarious Freudian slip, and focus on what he was explicitly talking about with Reuters, which is the resolution model which was just put in place in Cyprus:

A rescue programme agreed for Cyprus on Monday represents a new template for resolving euro zone banking problems and other countries may have to restructure their banking sectors, the head of the region's finance ministers said.

"What we've done last night is what I call pushing back the risks," Dutch Finance Minister Jeroen Dijsselbloem, who heads the Eurogroup of euro zone finance ministers, told Reuters and the Financial Times hours after the Cyprus deal was struck.

"If there is a risk in a bank, our first question should be 'Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?'. If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders," he said.

After 12 hours of talks with the EU and IMF, Cyprus agreed to shut down its second largest bank, with insured deposits - those below 100,000 euros - moved to the Bank of Cyprus, the country's largest lender. Uninsured deposits, those accounts with more than 100,000 euros, face losses of 4.2 billion euros.

Uninsured depositors in the Bank of Cyprus will have their accounts frozen while the bank is restructured and recapitalised. Any capital that is needed to strengthen the bank will be drawn from accounts above 100,000 euros.

The agreement is what is known as a "bail-in", with shareholders and bondholders in banks forced to bear the costs of the restructuring first, followed by uninsured depositors. Under EU rules, deposits up to 100,000 euros are guaranteed.

The punchline:

The approach marks a radical departure for euro zone policy after three years of crisis in which taxpayers across the region have effectively been on the hook for resolving problem banks and indebted governments via multiple rescue programmes.

That process, with governments and taxpayers bearing the costs and providing the back stop, had to stop, Dijsselbloem said. Recent financial market calm meant now was the time to make the change, although he conceded there was some concern that it could unsettle markets again.

If adopted by the euro zone, Dijsselbloem's template could also sound a death knell for a plan hatched nine months ago when the euro zone debt crisis was threatening to blow the currency area apart.

Then, euro zone leaders agreed that the bloc's future rescue fund should be allowed to recapitalise banks directly, thereby breaking the debilitating link between teetering banks and weak governments forced to bail them out. That may now never happen.

Asked what the new approach meant for euro zone countries with highly leveraged banking sectors, such as Luxembourg and Malta, and for other countries with banking problems such as Slovenia, Dijsselbloem said they would have to shrink banks down.

"It means deal with it before you get in trouble. Strengthen your banks, fix your balance sheets and realise that if a bank gets in trouble, the response will no longer automatically be that we'll come and take away your problem. We're going to push them back. That's the first response we need. Push them back. You deal with them."

Translation: it now officially sucks to be an unsecured creditor in Europe. In other words: an uninsured depositor.
Why this ad hoc dramatic shift in the European approach to bank solvency, which if anything makes the link between bank and sovereign closer than ever, and crushes all that Draghi achieved in the summer of 2012?
Simple: because what Cyprus allowed was the effective usurpation of democracy - the only reason the Cypriot bailout "passed" (at least so far) is because it was structured as a bank restructuring, a financial system "resolution", not a tax, and thus not in need of a parliamentary, democratic vote. Because as Cyprus also showed, votes to deprive depositors of cash, whether insured or uninsured, simply won't fly.
Hence the shift.
However, there is a problem: it means that depositors are now fair game everywhere, and that the ESM or EFSF, with their unlimited scope but "democratic" impleention pathway, are on the backburner.
And now, the scramble to pull uninsured deposits out of banks everywhere begins. Thanks to the new Eurogroup head.
"You ask for miracles, Theo. I give you Diesel-BOOM"
And now, every European depositor is going to their local financial dictionary to look up the definition of General Unsecured Claims, only to see a picture of... themselves.
http://www.zerohedge.com/news/2013-03-25...e-tumbling

[Magda Hassan]

http://www.southparkstudios.com/clips/22...ving-money

[Magda Hassan]

Cyprus The nuclear' option

By Golem XIV on March 22, 2013 in latest
Europe, the ECB and the IMF have put a gun to Cyprus' head.
The threat has been made public you do as we say and seize depositor's money or -

Germany to Cyprus: your banks might never re-open

Either Cypriot members of parliament ignore the will of the Cypriot people or the ECB stops supporting Cypriot banks and they implode. Which would mean either Cyprus leaves the Euro and re-introduces its own currency (which it could do) or it tells its people that ALL their money is now gone.
The problem is the private Cypriot banks spent a great deal of the money deposited in them on buying high yielding Greek bonds/debt which were partially defaulted by Greece with the say-so of the ECB et al. So bear in mind that whatever else Cyprus is guilty of (and there is plenty of guilt to go around) it is NOT a case of a government spending profligately. Cyprus debt to GDP at 87% was lower that the Europe area average of 93%.
The ECB doesn't care about that it just wants Cyprus to dry-run the new idea of making depositors pay for the sins of private banks directly from their savings rather than through the lengthy and political' process of official bail outs that we have had so far. Cyprus is the test of a more free market', no messy voting, no lengthy arguments, technocrats-decide-for-us solution.
I expect the Cypriot parliament will do what its told by the man holding the gun. It will be interesting to see if they enforce it themselves or resign en-masse and allow Europe to install another non-democratic Technocratic' dictatorship. If so it will be just another sign we have left the modern era and that Europe, if not the whole West, is now Post Democratic.
So does Cyprus have an option? I think they do. A nuclear one.
It is true they have no fiscal bullets left. They never really had any. All they ever really had was a little plastic tomahawk they got from Woolies. Even that's bent now. Even if they decide to let the ECB pull the life support on their banks the EU has said it feels confident no contagion will spread to the rest of Europe. What they mean is financial contagion. The contagion of one defaulted debt, causing another to default causing another. That danger, the EU thinks it has contained. And it may well have.
But Cyprus has one other option not fiscal but legal.
The nuclear option of Cyprus is to not seize the money in peoples' accounts but the information about that money. Such as where it came from, if it was criminal or laundered, and if so which banks, businesses and professionals knew about it and helped it on its way. The information which their regulators should have been collecting but never bothered to for the last 15 years. But even so, it is still there. Could still be used.
Cyprus has been laundering money. Its banks and businesses have helped. But so too have the banks and businesses of other countries. To my knowledge there is documentary evidence which implicates at least two huge European banks. A third, a German bank, would, I think, find itself dragged in also. As would dozens if not hundreds of British registered shell companies and the British authorities who do nothing to regulate them, and yet are implicated in four major fraud cases I know of personally.
You might say, So what! Nothing ever happens to the banks when they are found guilty of laundering. How does that count as a nuclear option for Cyprus?' and you'd be right. Nothing ever does happen to the banks. They pay a fine, and then carry on. But what would change everything and strike a cold fear into the heart of Europe, its banks and its ruling class, is if Cyprus decided to do what nobody anywhere has done begin a proper criminal investigation.
And it is the word criminal which would set a fuse burning which if not extinguished WOULD spread a contagion that would threaten Europe's banks and political system.
To understand why, you have to look at the monumentally important ruling in America in the case against HSBC. When the case first broke the headlines were all about the $1.92 billion fine HSBC had agreed to pay. What was made slightly less clear was that there had been an agreement between HSBC and the US Justice Department that HSBC would pay the fine in return for not being found criminally guilty of anything.
HSBC was not criminally prosecuted. They agreed on what is called a Deferred Prosecution Agreement". Which means they were only ever going to pay a fine, agree to improve, try to look sorry and walk away with a No admission of guilt' settlement.
This despite the FACTs that, as Lanny Breuer, Assistant Attorney General for the Department of Justice (DOJ) said, the evidence they had gathered proved,

"…stunning failures of oversight .… The record of dysfunction that prevailed at HSBC for many years was astonishing."

To which U.S. Attorney Loretta Lynch a lawyer involved with the case added,

"HSBC's blatant failure to implement proper anti-money laundering controls facilitated the laundering of at least $881 million in drug proceeds through the US financial system…"

Yet HSBC were not guilty of any criminal act, certainly not guilty of Money-laundering. Not only that but even though the case found that,

"…senior bank officials were complicit in the illegal activity."

No senior management was taken to court, no one faced criminal charges, no one went to gaol. Officially no one was guilty of anything more serious than having "turned a blind eye". That was the phrase used.
All of which festered quietly just out of public consciousness. Until Eric Holder, the U.S. Attorney General testified before the U.S. Judiciary Committee in March 2013 and made the astonishing admission,

"I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy,"

In other words here was the starkest admission, from the most powerful judiciary in the world, that the big banks are officially above the law. The law will not be applied to them. The U.S. Justice department made clear is that if you criminally prosecute a bank, and find it criminally guilty, the bank would most likely lose its banking license and the many institutions that the bank relies upon to buy its bonds, lend it money and purchase its securities would no longer be able to. They would not be allowed by law to do business with a criminal institution.
So the answer is to allow the institutions to act illegally but not prosecute them. That way everybody can do business with people breaking the law but without the nasty word criminal' being around to stink up the party.
Only poor and ordinary people are Criminals. Rich people have regulatory failures.
Sorry for the lengthy digression. Now back to Cyprus. I think you can see where this is going.
Cyprus' nuclear threat and option is to make it clear it is going to open criminal investigations into not just its own banks and those who run them, but the huge, systemically important foreign banks who have been dealing with Cyprus and its dirty money for years.
Every nation has so far done what the U.S. did to HSBC. They investigate and fine them making VERY sure there is no mention of criminal guilt. If one single country were to break this agreement and go after the criminals as criminals, the whole edifice is threatened with destruction.
It does not matter that Cyprus is small. Of course being found criminally guilty in a large country like the U.S. is an immediate death sentence. Guilt in Cyprus would not have the same immediate effect. But there would be a legal contagion because a judgment in one country is the basis of filing suit in others.
Currently the opposite is the staple of international banking. A regulator in one country investigates' one of its own systemically important banks and surprise, surprise finds that though there were problems', there was no criminal guilt. There are any number of ways of making sure you arrive at this happy conclusion. One way or another no one finds their important financial institutions criminally guilty ever.
If Cyprus did, the plague would be out.
Even the knowledge such an investigation was underway would shake share prices at the banks under investigation. Once the evidence came out in court it could not be put back. That evidence would be there for all to use in their own countries. Even if governments refused to do it, ordinary people and NGOs could.
This is the option Cyprus still has. I know, as well as you it won't happen. But it could. It should.
The Cypriot people know they have been guilty of turning a blind eye to tax evasion and laundering. They know the EU wants to strip them of their low tax regime just as they want to strip it from Ireland as well. But they also know the EU doesn't really want to lift the stone and expose the extent of criminal activity that has been going on because of who and which banks they might find hiding under there.
The Cypriot people have to decide will they try to save themselves by trying to carry on with the same criminals or will they turn to the one option no one even seems to be aware is a possibility the Truth.
http://www.golemxiv.co.uk/2013/03/cyprus...ear-option