Originally posted by Eladar
Evidently, most of the money that would be taken is Russian money.
Reportedly as well, the whole thing comes from these banks catering to their depositors' desire for a high ROI which led them to make high risk investments which failed and so the banks are failing, and the government if Cyprus can't or won't bail them out. The entire economy of Cyprus is driven by this desire for foreign money which they attracted with low tax rates and risky investments. All the bank's depositors knew or should have known the risk situation, not just the benefit situation they were setting up. Of course there are genuine victims, but there are a lot of whiners who got hoisted on their own petard.
Example:
Straddling both Ukraine and Cyprus, agricultural production company UkrLandFarming PLC is selling a debut dollar bond Tuesday, despite analyst concerns over Ukrainian and Russian companies' use of the Cypriot banking system as a transaction hub.
Cyprus's government is scrambling for support of a controversial draft bill that will tax deposits as part of an international 10 billion euro ($12.93 billion) bailout, forcing banks to possibly remain closed for longer than planned, while raising less revenue from a controversial deposit tax than required for the bailout.
Market watchers said demand could still be strong if the company can offer a yield sufficiently attractive for investors to take the risk.
Junk-rated UkrLandFarming, headquartered in Cyprus and with operations in Ukraine, is selling a dollar benchmark-sized, five-year bond, that is
expected to yield in the high 10%.
http://online.wsj.com/article/BT-CO-20130319-708040.html