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Is Cyprus Experimenting with a Dangerous Bailout Plan?

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  • Description

    BCG market analyst discusses the impact of Cyprus on global markets.

  • Duration 2:22
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Us data talk about the -- situation we liking -- market analyst at BGC partners over London.

And Mike this is the first time that people are being asked to participate in a bail out this way why now.

Well on the Cyprus is a special case and as much as -- banking sector was an enormous relative to the size of its economy was approaching 800% to GDP.

And it's this site has been -- -- Forced to borrow the total of banks.

From the EU fifteen point eight billion -- to put debt to GDP at something like a 180%.

So they have to -- the cash from somewhere that what about bond holders of sub debt holders in the banking sector so basically they took the money.

From depositors even then a quick number crush this morning I'm not even sure -- -- sustainable for Cyprus map.

And might we were talking to Chris speech -- last -- -- stress that this is a one off deal other countries don't have to worry about this starting a new precedent.

Do you agree with that.

Now annoyance -- -- and as I said I think that those that dislike the situation is gonna have to be revisited.

You know over the next eight year old to I think you know even -- the first time they've gone ahead with what Michael Palin it sounds like -- a positive thing.

But so that would -- the time that Spain had its bank restructuring its bailout -- -- in September last year.

That was a proposal on the table then that -- taken hits so I think this is going to be you know a slow -- -- the back of people's minds -- you can see the site of contagion.

In today's equity and bond markets across Europe.

-- comment -- my if you had -- with this sort of fear in the -- had used up people vote in -- And other countries from just running on the banks are pulling their money yeah.

What economy -- I mean unless you're witty to put a net capital controls which I believe would be changed the European single market.

It's that's that's that's a risk you have to run probably you have to say they generally speaking -- bank deposits -- A lot -- everybody else is what -- -- quite sticky.

You know it takes a lot for residents to actually -- that funds but of course in -- case that you know we think that.

At least 40% of the deposit pace is these these people like Russians you know but hopefully get a -- -- -- -- -- tax -- So you know maybe Cyprus -- going to Steve's sort of a run.

When they get access to the bank accounts which -- shuttle tomorrow.

That's my anger at BDC bars we'll see out all plays out tomorrow on the banks reopen again Mike thank you.

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