Cyprus crisis hits British investors

It's not JUST the Russians who are taking a hit

Savers hit as Cyprus crisis wipes £25bn off UK shares

SAVERS and pensioners in Britain are being hit hard by the financial crisis in Cyprus with £25billion wiped off the value of UK shares in a week, experts warned yesterday.

David Cameron has discussed the Cyprus crisis with Russian President Vladimir PutDavid Cameron has discussed the Express,

22 March, 2013

With fears growing that the island could go bankrupt on Monday, the FTSE has plummeted by 100 points with a knock-on effect for investors.

City analyst David Jones, of spreadbetters IG, said: “This week the FTSE-100 has started to suffer from a bout of Cyprus-inspired jitters.

“The eurozone crisis began back in 2010, with many assuming during its darkest hours that we would eventually see Greece leave, possibly followed by others. However, it’s now 2013 and all the members are still with us…for the moment. Cyprus has until Monday to come up with a bail-out plan.

“No plan means the failure of Cypriot banks, since the European Central Bank warned that it would cut emergency liquidity lines without one.”

In more bad news yesterday, it emerged that thousands of UK savers with a Cypriot bank with branches in London and Birmingham will not have the protection of the UK’s compensation fund if Cyprus does go under.

Instead, British customers of the Laiki Bank will be reliant on the Cyprus Deposit Protection Scheme, which covers up to £87,000. But a spokeswoman for Laiki Bank UK said there is no sign of its 13,000 depositors panicking and insisted it was “business as usual”.

An employee of a cash transporting money company waits outside a closed branch of the Bank of Cyprus

Prime Minister David Cameron discussed the crisis in Cyprus with Russian President Vladimir Putin during a phone conference yesterday.

The call came as Cypriot authorities sought to convince international lenders to contribute to the £4.9billion needed to secure an £8.5billion bail-out from eurozone countries and the International Monetary Fund.

Efforts to clinch a contribution from Moscow appear to have failed even though Russians have around £17billion deposited in the island’s banks.

Yesterday the Cypriot government was still frantically trying to come up with a Plan B to avoid the country’s collapse. Plan A was shot down by MPs furious over a plan to raid bank customers’ savings but a watered down levy remained a possibility.