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Were Cyprus banks really in trouble before they were forced to mark down their greek 5 and 10 year by 40%? If anything the lesson here is a responsible bank can
by trotsky 13y ago
Were Cyprus banks really in trouble before they were forced to mark down their greek 5 and 10 year by 40%? If anything the lesson here is a responsible bank can't hold debt that's backed (directly or indirectly, like laiki) by the ECB unless it's german.
- j-g-faustus 13y agoThe lesson is presumably that a bank should spread its bets. Here's the Central Bank of Cyprus in December 2012: When one invests over 100% of one’s capital in a single financial instrument – even if that instrument is considered low risk – it is indicative of poor risk management. [..]When bankers do the same with investors’ money – because their bonuses are linked to short-term income while the losses are underwritten by the taxpayer – the same behaviour is more than just poor risk management – it is ‘casino banking’. [1] So it looks more like Lehman Brothers. [1] http://www.centralbank.gov.cy/nqcontent.cfm?a_id=12472&lang=en http://www.centralbank.gov.cy/nqcontent.cfm?a_id=12472&l...
- Gmo 13y agoThe problem is that there is apparently no such thing as a responsible bank in Cyprus.