The Cypriot government is not actually bust by current European standards. It has a debt/GDP ratio no worse than France or Germany. The problem is the banks. They have gone bust (some more than others, and some not bust at all) because they suffered large haircuts on holdings of Greek government bonds in the EU-sponsored default in March 2012. They have had other losses too, including property lending in Cyprus which has gone sour, but the larger Cypriot banks were doomed by the terms of the Greek sovereign default as everyone knew at the time. They should have been recapitalised as part of the Greek deal. In best European tradition, the Cypriot can was kicked down the road and the inevitable endgame has come 12 months later. (...)
The first resort in any sensible bank recapitalisation is to wipe out the equity shareholders in the bust banks. This, unbelievably, has not yet been done: the depositors were even offered equity stakes in bust banks in return for the funds confiscated from their accounts. Next in line should be the junior (subordinated) bondholders, followed by senior bondholders, and ultimately uninsured depositors. The Cypriot banks have just €0.2bn in senior unsecured bonds, to be spared any haircut, and €2.5bn in junior bonds, subjected to an undisclosed haircut. Most of the €7bn gap was to be bridged through a levy on deposits, including those under €100,000 supposedly not at risk. The normal order of creditor preference was simply torn up.
Den ganzen Artikel gibt's hier.
PS: Ebenfalls lesenswert ist Gavyn Davies' Analyse auf FT.com.
