LONDON | March 6, 2015 | By Sigrún Davídsdóttir | Both in Cyprus and Iceland foreign funds flowed into the islands, in the end forcing the government to make use of extreme measures when the tide turned. These measures are normally called ‘capital controls’ which in these two cases hides the fact that the measures used are fundamentally different in all but name. In Iceland, the controls contain the effect of lacking foreign currency, effectively a balance of payment problem – in Cyprus, the controls were a way of defending banks against bank run, i.e. preventing depositors to move funds freely.
LONDON | By Sigrún Davídsdóttir | Why do the inhabitants of an EU country prefer to keep cash amounting to ca. 6% of GDP hidden at home? Badly burnt after the banking collapse in March 2013 Cypriots neither trust their government nor banks to keep their money safe.
By Alexander Apostolides via The Agora | Cyprus has the habit of grabbing international attention in a global way, only to then be marginalised as a footnote when the immediate crisis seems to have abated. This has been historically true in issues of communal violence and the Annan plan, in what we Cypriots call “the original Cyprus problem”. Sadly for Cyprus, this is also seems to hold true in regards to its financial crisis.
MADRID | By Javier Flores (Asinver) | For some, BitCoin is a bubble, even a pyramidal fraud. For others it’s the future of a free market economy. Worst case scenario, BitCoin could be a bubble, even a scam like Afinsa and Forum Filatélico, the two stamp ponzi schemes that imploded in Spain some years ago. 16,000 people lost their savings.
MADRID | By Javier Arce, editor at Revista Consejeros | Commentary scaring savers–whether in Cyprus, Spain, Italy or France–smells of negligence at the very least. In Spain, where we had to face capital outflows of over €200 billion in 2012, we are particularly aware of it.
By Tania Suárez | Vassos Shiarly, minister of Finance in Cyprus, admitted Monday night that his country would urgently need a bailout. The Wall Street Journal and the Financial Times refer to several European officials who have said that this rescue would rise to €3 billion to €4 billio. Shiarly said that “This issue is urgent. We know that the recapitalisation of the banks (in Cyprus) must be finished by June…