Daniel JosephLeave a comment
Well,it’s been an interesting week on the world frontier: the tiny island of Cyprus nearly challenged the religious trust that your money is safe in the bank. Freezing assets in the bank one day and then returning them missing 10% could have caused a catastrophe across Europe. The PIIGS (Portugal, Ireland, Italy, Greece and Spain) will all require further bailouts in the future, and if the residents of those nations believe the next bailout will mean a tax on their savings then a bank run could ensue across Europe. However, the Cypriot parliament voted no to the tax and have put forward an alternative to guarantee deposits under $100,000 and amalgamate Laiki Bank with the Bank of Cyprus. The details still need to be confirmed, but it looks like for now Cyprus won’t default and will receive the much needed $17 billion bailout.