The Evolving Cyprus Story

Here are links to posts of our coverage of the evolving Cyprus story.

Cyprus: The Dog that Did Not Bite:  Provides an overview of Cyprus from mid-Dec 2012 and notes that although Eurogroup head Juncker warned that Cyprus was more worrisome than Greece, the market did not seem to give it much thought. 

Why Cyprus is Important:  In this post from early Jan, we argued that Cyrpus' significance outstripped its size.  While we never thought a Greek exit was likely, we thought the risks of a Cyprus exit were greater than appreciated.  We recognized the claims of Russian monies as a significant complication.  Lastly, we also recognized that the Troika were not the homogenous bloc that it had earlier seemed.  

The Meaning of Cyprus:   We posted this over the past weekend.  It provides an overview of the terms of Cyprus' aid package and discusses the tax proposed on depositors.  We argued against a general run on European banks.  We note that depositors in the euro area do not have the senior status they have in the US and that there is precedent in Europe to tax financial assets, as Italy did to assure EMU entry.   Although Germany balked at bailing out all (read large Russian) depositors, reports indicate that the Cyprus President, the ECB and the EU advocating taxing small depositors too. 

Cyprus and other Market Drivers:  Provides updates on the market response, as well as, the attempt by the Cyprus parliament to re-draw the deposit take.  The vote now looks delayed even later than originally thought, with tomorrow now appearing more likely than today.