Cyprus Debate Continues
Media reports suggest the Cypriot government is currently redesigning how losses will be distributed amongst depositors in Cypriot banks, such that small depositors shoulder less of the burden (or perhaps escape entirely). The government is up against the clock though with parliamentary debate due to begin at 1600 GMT on Tuesday (after several previous postponements). Eurozone officials are unlikely to stand in the way of a revised plan, provided the same total of EUR 5.8 bn worth of deposits are seized. That was the clear message from the statement issued after Monday’s late-night teleconference call between Eurozone finance ministers. It seems finance ministers are also trying to distance themselves from the weekend agreement. Monday night’s statement declared that “The Eurogroup continues to be of the view that small depositors should be treated differently from large depositors and reaffirms the importance of fully guaranteeing deposits below EUR 100.000.” − although we note that this message was absent from the statement released over the weekend. Elsewhere the RBA minutes from the March 5th policy meeting offered no further insight into RBA thinking and AUDUSD was unmoved.
Click here to read the full report: UBS
UBS Investment Bank