This transcript is automatically generated
An unprecedented plan that would tax -- bank depositors in an effort to raise money.
And to help them receiving thirteen billion dollar bailout.
Cypriot leaders postponed -- vote on the proposed confiscation is as they race to prevent a looming collapse of the island's financial sector.
Elizabeth MacDonald is here with a -- and you've got breaking news on Elliot breaking news the government -- Cyprus is in talks with Russia marsh and made by Laura companies in Russia.
Made by two at Cyprus is leading banks -- -- -- -- -- one way to stop but I did -- -- I have -- Cyprus popular bank and bank of Cyprus may be and acquisition talks with companies in Russia because Russia.
It's heavily exposed to the crisis in Cyprus -- thirty out of the note that Russian companies and other institutions stand to lose two billion dollars -- the bank tax that's underway it's really basically.
It's attacks for equity swap -- we get shares in the bank and that's sure that they want that but what's also influx is did the rate the tax rate on the deposits.
What is not changing is a dollar amount that these guys want in the ballots from for the -- they want seven billion dollars out of this tax to fund more than half.
Of the bailout for Cyprus so.
Here's the way it's playing damn right as of this hour 3% tax.
On deposits less than that 130000.
So what's and what is in that though -- its first 20000 in euros will may be exempt.
So they want to prevent that does it -- whatever if this looks like attacks is gonna look like.
In the bottom line is it gonna get to that seven billion dollars somehow.
So you -- seeing nearly 13% tax on these.
650 K crowd but you know what they don't want here is another lost five years they've been at this for five years with the Cyprus and neighboring Greece -- -- it JPMorgan Chase Goldman Sachs Morgan Stanley Citigroup already weighing in on this estate they'd like the bank tax Buffett said worsen -- -- think it's the best of a really bad situation.
Up because there's no bond.
You know big holders over there -- so this in -- depositors that it didn't want to stick to cut its senior unsecured they're gonna get really burned but when you look at the bank balance -- they really have a pretty illiquid bond market in Cyprus.
And that's all they can do is basically tax the depositors to get this -- going.
And if they don't do the -- guys -- Cyprus will default and those banks will collapse anyway so that's what the word is almost.
Very interesting to see though when they -- banks again whether there's a run on the bank is even if you have the Russians coming in a -- these things you could still -- -- run.
Yeah and then -- no deposits to -- -- I mean Italy tried this in 92 to limited effect.
The type of tax bank deposits and there was a run itself on up and attacks in Liz -- with a -- -- on that site.