A «fiscal win» for Cyprus

While slow at first to admit it had a crisis, Cyprus was fast to react under the new government, in power for 18 months this June. After a rather dramatic bail-in, which involved taking depositors’ money to rescue troubled banks, Cyprus lingered in a slow but painful recession that saw unemployment approach 20% -higher than…

A simple warning on loan restructuring…

One of the largest loan takers in Bank of Cyprus –a land developer- today owes the bank 457 million euro. In an internal audit carried out at the beginning of the crisis, the bank noted that he had not serviced any of his loans –including interest- since 2009. Provisions? None. There are several such cases…

The toughest econ quiz so far…

Let’s try this: In March, when the second biggest SIFI was wound up and the biggest went into resolution, Cyprus had a two-week long bank holiday. Since then, and with capital controls imposed, fuel sales dropped 9.8%, a scary level for a country with no public transport and hence very inelastic fuel consumption. Tourism, a…

Cronies redux -Cypriot chaebols

In many ways, none of this is new. The Japanese have felt the pain of connected lending and zaibatsu inbreeding, as have the Koreans with their chaebol. I’m reading that the terms are actually very well chosen- their transliterations apparently mean something along the lines of “financial clique” and “wealthy clan”. This, of course, is…

And the ECB? What about the ECB?

  Behind the grant monument to incredible mistakes that is the Cyprus crisis, lingers a long list of ominous and disturbing deeper questions. There is no doubt that Cyprus got it wrong for years. There is also very little doubt that the Eurogroup got it even more wrong two weeks ago. The entire story, however,…