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View Diary: Bank Run in Cyprus, Will it Spread to Southern Europe? (322 comments)

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  •  The Russian money laundering thing is a sideshow, (6+ / 0-)

    that is not why these banks are in trouble. The diary even says this:

    The banks in Cyprus failed because they took huge losses when the EU bailed out Greece, not because of anything done in Cyprus. Banks in Cyprus have taken large deposits from Russia, but alleged Russian money laundering activities have nothing to do with the bank failures.
    Nobody is "covering the deposits" of Russian mobsters. This is a part of the European banking crisis - the Cypriot banks unwisely invested in some of the riskiest banks in Europe, and through their losses there are now undercapitalized.
    •  Yes, the haircuts forced on Greek bondholders (2+ / 0-)
      Recommended by:
      doc2, nchristine

      began this.  It sounds like banks in Cyprus were some of those bondholders.

      This was not done to bail out bank shareholders in Cyprus as stated upthread.  They in fact will be severely diluted.

      "The way to see by faith is to shut the eye of reason." - Thomas Paine

      by shrike on Sun Mar 17, 2013 at 07:34:54 AM PDT

      [ Parent ]

    •  Indeed, the banks passed a stress test (0+ / 0-)

      less than two years ago.

      "To recognize error, to cut losses, to alter course, is the most repugnant option in government." Historian Barbara Tuchman

      by Publius2008 on Sun Mar 17, 2013 at 08:45:31 AM PDT

      [ Parent ]

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