Cypriot deal

BREAKING NEWS: Bailout deal reached

Cyprus Mail – 12:11 GMT

UPDATED 02:11

Acting president Yiannakis Omirou has confirmed that a deal has been struck between Cyprus and international lenders.

Government sources suggest that the deal provides for a 30 per cent haircut on deposits of over €100,000 at Bank of Cyprus while reports said Popular Bank would be resolved.

Laiki deposits under 100,000 will be transferred to a ‘good bank,’ reports said.

Rampapalooza As Cyprus-Troika Reach Deal

Zero Hedge,

24 March, 2013

While we have little color on what kind of carnage the President of Cyprus had to accept to his fellow countrymen, the ness is that :

• *CYPRUS, TROIKA REACH AGREEMENT IN PRINCIPLE, EU OFFICIAL SAYS
  
  
• *DEAL MADE AT DINNER WITH DRAGHI, LAGARDE, VAN ROMPUY, BARROSO

The terms, unsurprisingly what zee Germans wanted, are:

i) Laiki to be wound down;

ii) Bank of Cyprus to survive but with deposit haircuts, and

iii) deal would see secured deposits in Laiki moved to Bank of Cyprus.

In other words, a deal far worse then the original on proposed by the Eurogroup last week - when the banks still existed. The key appears to be the 'saving' of the insured depositors (crucial to avoid a pan-European bank run) and the crushing of the 'whale' depositors.

 S&P 500 futures and EUR are surging, Gold is dropping modestly.

 We await final confirmation of the final terms of the final deal once the Cypriot people wake up (anddon't forget the ECB 'standard of living' rules).  

The Cypriot Parliament still has to vote for this - and not one of them voted for it last week.

 

 

Filling the 'Cyprus' Gap

 

 

Treasuries sold off- 10Y back to 1.945% (+2bps) and 30Y 3.17% (+3bps)

 

This is far from over...

So let us get this straight, we have no further information on the actual terms of the deal than we did on Friday afternoon; the government (who rejected the deal last week) has no details of the deal yet; and the actual impairment for the depositors is far worse than last week's rejected deal; and the market is rallying... 

It would appear the week was spent sorting through the names of bank accounts in each bank and the one with the most ending in '-ov' is to be wound down...Laiki

 

Step 1 appears to be 0500GMT Eurogroup Meeting (as per Holland's Diesel-Boom) agreement...