Cyprus And The Contagion Myth - Citi
From efxnews.com
Will there be deposit flight from the periphery and indeed from Cyprus itself, after the Cypriot depositor haircut? Probably yes, answers Citibank in a note to clients. Will it be systemically damaging? Most likely not, Citi adds. As regard to the future deposit flight from Cyprus, Citi thinks that it is likely because the size of the haircuts is unlikely to restore the Cypriot banks to solvency. "Further haircuts are therefore likely. The anticipation of future haircuts causes deposits to run. If the Cypriot sovereign, following the current haircuts, were to take over the bad assets of the Cypriot banks, the banks ...
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