Banks in Cyprus have been closed since the country put together a deal with the EU over the weekend to bail out its troubled banking system.
The thing that makes this deal so controversial is that every person with a savings account at a bank in Cyprus will be subjected to an instant, 10 per cent expropriation of his or her account balance before banks re-open.
They were originally supposed to re-open their doors today after an EU-wide bank holiday Monday to observe St. Patrick’s Day.
Then, it was reported that they would remain closed until Thursday.
A new report from Dow Jones suggests that Cypriot banks now won’t be re-opened until next Tuesday.
*Cyprus Banks Could Stay Closed Until Tuesday March 26 – Source
— DJ FX Trader (@djfxtrader) March 19, 2013
That was followed by reports that the ECB is working on capital control plans for when the banks re-open.
RANsquawk: #Cyprus and ECB officials working on capital control plans for when banks open, include limits on daily transactions
— Open Europe (@OpenEurope) March 19, 2013
Lorcan Roche Kelly, Chief Europe Strategist at Trend Macrolytics, tweeted that capital controls are a bad idea:
I dislike depositor bail-ins, but capital controls are in-f-ing-sane. Let’s hope there is nothing more than rumour to this
— Lorcan Roche Kelly (@LorcanRK) March 19, 2013
Meanwhile, depositors trying to access their cash in Cyprus remain in limbo.
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