Yesterday’s optimism has given way to fear. The EU finance ministers’ leader: Cyprus, a model for future bailouts. Analysts: taboo on the inviolability of bank deposits broken.

Hong Kong (AsiaNews / Agencies) - The Asian markets are negative today. Analysts attribute the fact to the comment by a European Union (EU) official that the tax implemented on deposits in Cyprus could be a model for saving other banks in the euro area.

Jeroen Dijsselbloem, Head of the EU Finance Ministers, told he Financial Times yesterday that the recapitalization of banks should not fall on the public sector, but on stock and share holders and, if necessary, on account holders.

His comment came on the heels of an agreement between Cyprus and the "troika" (EU, European Central Bank and the International Monetary Fund, IMF) for a loan of 10 billion euros, in exchange for a forced withdrawal from accounts above 100 thousand euros in the two largest banks in difficulty: the Bank of Cyprus and Laiki Bank.

This morning Tokyo was at -0.3; Hong Kong lost 0.18; Shanghai was down by 0.34; Seoul flat.

Before Dijsselbloem's comments, the markets had been positive and there was a widespread sense of optimism. Until now, the European crisis had avoided touching private deposits. This was not the case in Ireland, or Spain. But, according to analysts, with Cyprus "a taboo has been broken."

In an interview with Bloomberg, Charles Goodhart, emeritus professor at the London School of Economics, said: " They will swear black and blue that Cyprus is a unique case but so was Greece...you can talk about the inviolability of insured deposits but the problem now is would anyone believe you."

Meanwhile, today the Cypriot banks are closed and the percentage of forced withdrawals on accounts with more than 100 thousand Euros has yet to be defined. The IMF has obtained agreement that this percentage will not be submitted to the vote of the Cyprus Parliament.

 

• ASIA-CYPRUS
• markets
• bank
• deposits
• EU
• crisis