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CRISIS IN CYPRUS IS NEGATIVE FACTOR FOR RATINGS OF ALL EUROZONE COUNTRIES. MOODY'S INVESTORS SERVICE
18:50, 25 March, 2013
YEREVAN, MARCH 25, ARMENPRESS: Crisis in Cyprus was credit negative
for all sovereign ratings in the euro area, reports Armenpress,
referring to the statement of Moody's Investors Service.
"Even if negotiations are successful and Cyprus remains within the
euro area, policy makers' recent decisions raise the risk of deposit
outflows, capital flight, increased bank and sovereign-funding costs
and broader financial market dislocation, even if those decisions
don't disrupt financial market calm in the present," the credit
ratings agency said in a statement.
As reports Armenpress, referring to BBC, two Cypriot banks based in
the UK have sought to reassure customers about the security of their
deposits. The Bank of Cyprus UK, which has 50,000 UK customers, said
there would be no effect on deposits, as it is a UK bank and subject
to UK financial regulation.
But the Cyprus Popular Bank or Laiki Bank, which has 13,000 account
holders in Britain, is not incorporated under UK banking law.
It said deposits would be guaranteed at least up to £85,000. Following
the agreement between EU finance ministers and the Cyprus government,
anyone with savings above 100,000 euros (£85,150) in Cyprus may lose
a proportion of their money.
So it is not yet clear whether customers with more than £85,000 in
their Laiki accounts in the UK may have to forfeit some of their
savings.
A spokesman for the bank said they were waiting to hear whether sums
greater than that limit would be guaranteed. But otherwise, he said,
they were trading normally. The Bank of Cyprus (UK) is separately
capitalized from its parent company and its customers are included
within the UK Financial Services Compensation Scheme.
"There is no effect on deposits with Bank of Cyprus UK Limited,
which is a UK bank," said a spokesman.
The situation with customers of Laiki Bank is different, as it is
not part of the UK compensation scheme, which guarantees deposits up
to £85,000.
Nevertheless, it has insisted that customers can take out as much
cash as necessary, if withdrawals are allowed on their account.
"We have money available to give out. We have a sea of cash," said
a spokesperson.
Nevertheless, it admitted that discussions were continuing with the
Financial Services Authority, the Bank of England and Laiki's parent
company in Cyprus. Should UK depositors lose money, the government
would have to decide whether to compensate them directly. After the
Icelandic bank Landsbanki collapsed in October 2008, both the British
and Dutch governments decided to compensate more than 340,000 customers
who had lost money.
18:50, 25 March, 2013
YEREVAN, MARCH 25, ARMENPRESS: Crisis in Cyprus was credit negative
for all sovereign ratings in the euro area, reports Armenpress,
referring to the statement of Moody's Investors Service.
"Even if negotiations are successful and Cyprus remains within the
euro area, policy makers' recent decisions raise the risk of deposit
outflows, capital flight, increased bank and sovereign-funding costs
and broader financial market dislocation, even if those decisions
don't disrupt financial market calm in the present," the credit
ratings agency said in a statement.
As reports Armenpress, referring to BBC, two Cypriot banks based in
the UK have sought to reassure customers about the security of their
deposits. The Bank of Cyprus UK, which has 50,000 UK customers, said
there would be no effect on deposits, as it is a UK bank and subject
to UK financial regulation.
But the Cyprus Popular Bank or Laiki Bank, which has 13,000 account
holders in Britain, is not incorporated under UK banking law.
It said deposits would be guaranteed at least up to £85,000. Following
the agreement between EU finance ministers and the Cyprus government,
anyone with savings above 100,000 euros (£85,150) in Cyprus may lose
a proportion of their money.
So it is not yet clear whether customers with more than £85,000 in
their Laiki accounts in the UK may have to forfeit some of their
savings.
A spokesman for the bank said they were waiting to hear whether sums
greater than that limit would be guaranteed. But otherwise, he said,
they were trading normally. The Bank of Cyprus (UK) is separately
capitalized from its parent company and its customers are included
within the UK Financial Services Compensation Scheme.
"There is no effect on deposits with Bank of Cyprus UK Limited,
which is a UK bank," said a spokesman.
The situation with customers of Laiki Bank is different, as it is
not part of the UK compensation scheme, which guarantees deposits up
to £85,000.
Nevertheless, it has insisted that customers can take out as much
cash as necessary, if withdrawals are allowed on their account.
"We have money available to give out. We have a sea of cash," said
a spokesperson.
Nevertheless, it admitted that discussions were continuing with the
Financial Services Authority, the Bank of England and Laiki's parent
company in Cyprus. Should UK depositors lose money, the government
would have to decide whether to compensate them directly. After the
Icelandic bank Landsbanki collapsed in October 2008, both the British
and Dutch governments decided to compensate more than 340,000 customers
who had lost money.