Savings Account Seizure Plan Draws Fury in Cyprus
(NICOSIA, Cyprus) — A plan to seize up to 10 percent of savings accounts in Cyprus to help pay for a €15.8 billion financial bailout was met with fury Monday, and the government shut down banks until later this week while lawmakers wrangled over how to keep the island nation from bankruptcy. Though the euro and stock prices of European banks fell, global financial markets largely remained calm, and there was little sense that bank account holders elsewhere across the continent faced similar risk. Asian stock markets rose Tuesday, shaking off jitters sparked by Cyprus’ financial crisis. Political leaders in Cyprus scrambled to devise a new plan that would not be so burdensome for people with less than €100,000 in the bank. The authorities delayed a parliamentary vote on the seizure of €5.8 billion and ordered banks to remain shut until Thursday while they try to modify the deal, which must be approved by other eurozone governments. Once a deal is in place, they will be ready to ...
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European Stocks Tank at Open on Cyprus Fears
(LONDON) — European stocks slumped at the open Monday as investors gave their initial verdict to a weekend plan to tax depositors in Cypriot banks as part of a bailout of the Mediterranean island nation. Though Cyprus only accounts for around 0.2 percent of the combined output of the 17 European Union countries that use the euro, the tax on depositors has stoked fears of bank runs in other troubled European economies. Since the European debt crisis began in late 2009, savers have been spared. The bailout of Cyprus, agreed to early Saturday, foresees a 6.75 percent levy on deposits below €100,000 ($130,860) rising to 9.9 percent on those above. People in Cyprus have reacted with fury to the news and the country’s new president is apparently working out a new plan to be put to Parliament that will limit the hit on small depositors. Parliament is due to vote on the bailout later. If it backs the levy, then Cyprus would be eligible for a €10 billion financial rescue from its partners ...
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Too European To Fail? New E.U. Banking Safety Net Takes Shape
The agreement by E.U. leaders to establish a pan-European supervisory system for banks is an important political breakthrough in the drive to shore up the euro-zone’s financial stability, and by European standards it was reached relatively quickly — just seven months after the idea was first put on the table. Starting in March 2014, the European Central Bank will begin directly supervising all banks in the euro-zone with assets above 30 billion euros ($40 billion), which in practice means about 80% of them. The aim is to provide a far more rigorous oversight for the European banking system than the patchwork of national regulators who are at times prone to domestic political influence. Indeed, the financial crisis in 2007 has exposed the extent to which banking regulation is highly politicized in countries including Spain, where the woes of a handful of savings and loans have plunged the entire nation into crisis and led to the ouster of the head of the central bank. But, as so often ...
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Too European To Fail? New EU Banking Safety Net Takes Shape
The agreement by EU leaders to establish a pan-European supervisory system for banks is an important political breakthrough in the drive to shore up the euro-zone’s financial stability, and by European standards it was reached relatively quickly — just seven months after the idea was first put on the table. Starting in March 2014, the European Central Bank will begin directly supervising all banks in the euro-zone with assets above 30 billion euros ($40 billion), which in practice means about 80% of them. The aim is to provide a far more rigorous oversight for the European banking system than the patchwork of national regulators who are at times prone to domestic political influence. Indeed, the financial crisis in 2007 has exposed the extent to which banking regulation is highly politicized in countries including Spain, where the woes of a handful of savings and loans have plunged the entire nation into crisis and led to the ouster of the head of the central bank. But, as so often in ...
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SEC Official Elisse Walter Chosen to Lead Agency
(WASHINGTON) — President Barack Obama has chosen Elisse Walter, one of five members of the Securities and Exchange Commission, to become chairman of the agency. Chairman Mary Schapiro will leave next month after a tumultuous tenure in which she helped lead the government’s regulatory response to the 2008 financial crisis. Walter will take over at a critical time for the SEC, which is finalizing new rules in response to the 2008 financial crisis. She can serve through 2013 without Senate approval because she’s already been confirmed to the commission. Obama will need to nominate a permanent successor before Walter’s term ends. News reports have suggested that Mary John Miller, a top Treasury Department official, is among those mentioned as a potential candidate. (MORE: Obama Selects Three Financial Regulators) Walter, who is a Democrat, was appointed to the SEC in 2008 by President George W. Bush. Earlier, she was a senior official at the Financial Industry Regulatory Authority, the ...
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