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In Europe and perhaps even get exported to the state join me now -- Davis senior analyst for Morningstar Aaron good to see do we know whose.
Idea this was -- this was this something that that the cypriots came up whether or that the European.
Monetary union said this is what you have to do.
They EU officials right now hardly needed -- Cyprus government they gave them half of the bailout money and and basically said you have to come up with the other half and that's.
I think looked like the easiest way to get it.
But you know the interesting thing you know we just had breaking news from Elizabeth MacDonald reporting that the banks apparently were okay witness that the banks would rather have.
This did the depositors be stuck with paying this off and then have -- to expose them in any way.
Yeah why do you not think in many ways -- -- that's dangerous precedent but at the same time it's it's money that's just sitting there and it's it's.
Easy to death take a piece of it it's much harder than to try to get money out of landowners.
Or something like that ended.
Banks credit society -- it's the same I -- and that's the thing that we have to keep in mind.
It is the same as property whether it's whether it's cash in the bank because.
There was something that it -- -- it's a quaint old expression but it was called deposit insurance remember that you were supposed to be insured.
Against any kind of confiscation of the money that you have already earned them that -- who have already pay taxes on whatever happened.
To the idea of deposit insurance.
Well I think that's exactly right I think that that's why this that's such a dangerous precedent and that the box holders are taking a haircut it's.
It's really up and in the capital structure the way that we understand it -- another colleague -- -- instead of a haircut.
So it's offending capitalism by the way Eric can you hold -- 12 because we have some breaking news from Adam on -- -- -- Yet they're revising once again this planted -- deposits and apparently the Euro group after.
A teleconference with eurozone finance ministers seems to be giving the Cypriot government approval for -- what they're saying -- Elizabeth -- has reported they are now agree that depositors with less than 100000 euros -- -- 129600.
Bucks in the bank.
Should be protected.
From the Levy now this doesn't say whether this is actually.
No tax on those smaller deposits or whether it's the 3% that Elizabeth was talking about.
But according to a Greek finance ministry source who spoke on the condition of anonymity.
They're saying that and they agree that the depositors with a 100000 euros or less should be protected.
And that sector is still has to raise the five point eight billion euros from some form of levity as planned.
Again the -- up parliament voting on this rescue package Tuesday.
David -- and again thank you -- today of the question we'll go back to Aaron now from Morningstar -- -- -- -- the question is whether it could happen here.
There are a lot of officials here that have been monitoring this is situation fact that treasury -- -- issued a statement.
We just read part of that the Treasury Department is monitoring the situation Cyprus closely.
And secretary -- Jack -- is the new treasury -- been speaking with his European counterparts.
It's important is Cyprus and -- Euro area partners work to resolve the situation in a way that is responsible and fair and insurers financial stability now again is it fair Aaron damn big government come -- rather this all -- solve problems that the government come in.
And to take.
My personal property property I'm already pay taxes on.
Well there -- gonna have to take money from somebody and I think that that if they did take it but the bondholders the government would just end up bailing out the banks eventually anyway so they're trying to get to a today and of the game quicker which -- -- it's it's never fair.
Which which banks are safest and which banks -- work risk is as a result of what's going on there.
-- not say European global -- -- fortunately have very little exposure to that that.
Fact and -- a little a bit of exposure to Cyprus but it's not very materiel.
I think -- a bigger risk is that.
-- and deposit flight could spread to Italy and Spain and most mobile base have a lot of exposure to those two countries and their economies are much bigger and -- -- what about HSBC.
Your Barkley -- I know both of those have have a lot of branches -- snipers.
Well -- have a lot of exposure to state which is something that that I'd be worried about and -- BC as a global they have exposure to it just about every -- all deciding -- out really has direct exposure to fight press and it's pretty small and and national bank of -- but -- It's basically government -- -- now what.
I don't understand maybe you can explain it to me -- is why is it.
This is that these are international banks I can understand Cypriot banks -- that's a different situation some of those might be bought out by the Russians anyway.
But if I have an international bank private international account in an international bank in Cyprus or in Spain it's in -- international currency euros.
Why can't I just move my my operation to another to another country that's not a risk.
Well I think that's exactly what they're worried about their -- that -- designate how audience Cyprus right now that they expected to reopen on Thursday.
And they're watching closely for signs of deposit -- and if -- -- they think that officials are prepared to impose capital controls.
Capital controls on an international -- currency I don't know how you do that do you.
Well they just -- you take -- bake you if they won't let you take care money out of sight press.
But if you're right.
If -- money is and -- your money is in euros in an international bank wanted to just take it out from another account -- -- money it's not like your cash is actually in Cyprus international banks have accounts all over the world that you can.
Access from all over the world.
Yeah instead there's some severe rise to an extent citing better out has us subsidiary in -- press and the biggest banks in Cyprus are local bank.
-- Do you see this spreading -- and we got to go but do you see this spreading -- Beyond Spain and Italy possibly to our whole international banking humidity and even over here.
That's not likely I think that that it might even take a while to spread says Spain Italy and that may only happen if we start to see -- Citi Trends in credit quality.
Aaron Davis from morning -- -- good to see a good to have --
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