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« MUST SEE: The Great Cyprus Bank Robbery | Main | ATTENTION HOUSTON: We Have A Perp Walk »

What Exactly Is Inside The Bank Of Cyprus?

Bank of Cyprus vs. Spanish and Italian banks.

Tom Keene earlier today with Bloomberg's single best chart examining assets and balance sheets at several European banks in relation to the Bank of Cyprus.  The conclusion -- unlike Cyprus, for Spain and Italy, there's enough debt to spare depositors in a future bank bail-in.


Father Of The Euro: "Italy Is Next After Cyprus"



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Reader Comments (11)

Thats a crazy chart. How in the hell are they insolvent with that ratio of deposits? Rhetorical question since we know its not about the insolvency, but rather about the robbery.
Mar 28, 2013 at 2:38 AM | Unregistered Commenteropti
Can someone explain how that made any sense? Debt can be converted? That sounds absurd
Mar 28, 2013 at 8:13 PM | Unregistered CommenterIjusthadanayeursm
I think the point may be that, with a large cash position based on actual deposits, the bank is low-hanging fruit - a more ready source of heist-able funds than a bank with mostly debt on its balance sheet.

Can't seize debt, unless fiscal suicide is in mind. So the lesson is: if you want your bank to survive, make it as insolvent as possible, so that your government and the ECB will have nothing easy to steal. They will have to resort to austerity blackmail against the population, instead of just a simple weekend smash-and-grab.
Mar 29, 2013 at 2:52 AM | Unregistered Commenterbaindrain
In Cyprus, they took deposits which create a liability (on which they offered 0.5% interest) and bought Greek bonds offering 5% or more return. A brilliant business model, borrow low and lend at high returns.
Unfortunately, the Greek bonds failed and their Billions in assets were reduced by +40%, however their liability to depositors continued. Thus making the banks insolvent.
The ECB provided funds to Ireland, Portugal, Spain to cover the likely withdrawal by depositors and kept the banks from having a "Northern Rock" moment. They said we will lend money to the banks, but the Governments (i.e. the taxpayers) must sign the repayment guarantees.
Because many depositors in Cyprus are not EU citizens, and because there is an election coming in Germany, they decided to "play hardball" with Cyprus.
Deposits are the worst kind of liability, they are payable on demand. The least dangerous from a bank point of view is Equity, followed by long term bonds, and and other bonds.
However, this is "chump change" to their liabilities in Derivatives which are gambles on future financial conditions and will almost certainly destroy the whole banking community when any major change (default by a major player e.g. Italy, France, Britain etc.) takes place.
If you are not in Cyprus and have any significant money in a bank either as deposit or a bond (you could not possibly be dumb enough to own shares) I would suggest you realise that ALL countries have laws which allow the banks to grab deposits ( and the contents of client safe boxes) should they need to "recapitalise" their balance sheets.
The ordure is approaching the rotating arrangement of vanes or blades at high speed and only a short time remains before contact.
Good luck.
Mar 29, 2013 at 12:57 PM | Unregistered CommenterPJ London
77% in deposits. Holy crap. This is really just insane.
Mar 29, 2013 at 8:38 PM | Unregistered CommenterSKINFLINT
Ya know, it has occurred to me here of late that Europe is going through the same thing that we are. Extraction. I guess that somewhere there is an answer to this. Mr. De Carbonnell states his case and that he believes that central banks and ther ilk are not party to this, but I think otherwise. Very much a symbiotic relationship with banks money and corporations or oligarchs. However you want to say. Anyway, money has disappeared in large amounts and there has been no accounting for it. Above my pay grade though.
Mar 29, 2013 at 9:10 PM | Unregistered CommenterSKINFLINT
Now this here is some funny stuff. Well not REALLY funny, but ironic. Maybe not entirely ironic, though there may be some of that in here as well. Sad. Yea. Thats it. Sad. Sort of. http://www.zerohedge.com/news/2013-03-29/oooops
Mar 29, 2013 at 9:18 PM | Unregistered CommenterSKINFLINT
Holey Shite Batman, They are making donuts with our money. No Robin, A donut is what you will be sitting on after having your ass reamed by the ECB. http://www.reuters.com/article/2013/03/29/us-cyprus-parliament-idUSBRE92G03I20130329
Mar 29, 2013 at 9:27 PM | Unregistered CommenterSKINFLINT
Extraction? Absolutely. Planned and executed.

As they have here, there are plenty of Goldman alumni in place to guide the process: Draghi, Monti, Carney, Papademos, Issing, Sutherland. The list is long and smelly.
Mar 30, 2013 at 3:50 PM | Unregistered Commenterbaindrain
Mar 30, 2013 at 5:51 PM | Unregistered CommenterSKINFLINT
"What Exactly Is Inside The Bank Of Cyprus?"

A hell of a lot less then there should be.

Looks the Cypriot politicians and elite are exactly like the politicians and elite in the U.S.A. Use the government to steal most of the money and make the middle class people and small business pay the tab, while the Cypriot politicians, rich Russian oligarchs and other wealthy depositors get their loot out of reach.

Apr 1, 2013 at 11:43 AM | Unregistered CommenterSagebrush

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