Draghi's Horses: Banking Union, Cyprus Solution

Consistent with our tweet:

The final Eurogroup decision on Cyprus ended up restoring deposit insurance and imposing a resolution of only the two money-center banks in Cyprus, leaving the rest of the banking system initially untouched. However, the message that it was the political intention of the Eurogroup to liquidate Cyprus' "business model" make a run on the remains of the Cypriot banking system a near certainty, and indeed the Cypriot parliament legislated stringent capital controls. But the Cypriot capital controls not only ringfence the Country to avoid a capital flight: they also completely tear up the modern payment system that used to exist in Cyprus. For ordinary people there will be restrictions on cash withdrawals, on check cashing, on payment orders, and on the use of payment cards. But the capital control bill passes by the Cypriot parliament also allows the monetary authorities to limit interbank lending. In order to save the Euro, and in order to save Cyprus from a crippling capital outflow, the entire payment and clearing system is Cyprus has been destroyed. The fact that not only the Eurogroup but the European Commission and the central banks involved are going along with this with only a meek statement that the capital controls should be lifted "as soon as possible". Eurointelligence – All of Draghi's horses – thoughts on banking union and the Cyprus 'solution'.


If you are an investor in 1-4 unit properties in Arizona, California, Nevada, Oregon, Utah, or Washington, please do the financially responsible thing and make sure you have proper Landlord Insurance with PropertyPak™. We love focusing on real estate and the economy in general, but we are also here to serve your insurance needs.

Hill & Usher (PropertyPak™ is a division) has many insurance offerings. See our menu above for more info and links.

Did this post help you? Let us know by leaving your comment below.

Note: This blog does not provide legal, financial, or accounting advice. Seek professional counsel.

Furthermore, we, as insurance producers, are prohibited by law from disparaging the insurance industry, carriers, other producers, etc. With that in mind, we provide links without staking out positions that violate the law. We provide them solely from a public-policy standpoint wherein we encourage our industry to be sure our profits, etc., are fair and balanced.

We do not necessarily fact checked the contents of every linked article or page, etc.

If we were to conclude any part or parts of our industry are in violation of fundamental fairness and the legal standards of a state or states, we'd address the issue through proper, legal channels. We trust you understand.

The laws that tie our tongues, so to speak, are designed to keep the public from losing confidence in the industry and the regulatory system overseeing it. Insurance commissioners around the country work very hard to analyze rates and to not allow the industry to be damaged by bad rate-settings and changes in coverages. The proper way for people in the industry to deal with such matters is by adhering to the laws, rules, and regulations of the applicable states and within industry associations where such matters may be discussed in private without giving the industry unnecessary black eyes. Ethics is very high on the list in the insurance industry, and we don't want to lose the people's trust. That said, the industry is not perfect; but what industry is?

For our part, we believe in strong regulations and strong regulators.

We welcome your comments and ask you to keep in mind that we cannot and will not reply in any way or ways where any insurance commissioner could rightly say we've violated the law of the given state.

We are allowed to share rating-bureau data/reports and industry-consultant opinions but make clear here that those opinions are theirs and do not necessarily reflect our position.

Subscribe