EU Leaders To Set Tight Timetable On Completing EURO BANKING UNION.

EU Leaders To Set Tight Timetable On Completing EURO BANKING UNION.(Reuters).

* EU wants agreement on bank resolution by end-year

* Wants plan on rewarding reforms by December

* Reforms seen key for sustainable growth in Europe

BRUSSELS – European leaders will confirm on Friday an ambitious timetable for the completion of a banking union, Europe’s biggest project since the euro, and set a December deadline for fleshing out the idea of rewards for structural reforms in the euro zone.Policy-makers believe a banking union in the 18 countries that will share the euro from next year will help increase the flow of credit, boost growth and help prevent financial crises in the future.

Under the union, the European Central Bank will directly supervise the euro zone’s 130 biggest banks from November 2014 and have the power to take over supervision of any of the smaller banks if needed.

Such a Single Supervision Mechanism is to be accompanied by a Single Resolution Mechanism (SRM) – a yet-to-be-created euro zone authority with its own fund that would decide how to wind down or restructure banks that are no longer viable.

As an intermediate step towards the SRM, the euro zone wants to agree on a Bank Resolution and Recovery Directive (BRRD), under which national authorities would coordinate their actions to deal with cross-border bank failures.

Euro zone finance ministers have already agreed what this intermediate law should look like, but they now need to reach a deal on the details of the legislation with the European Parliament.

European leaders meeting in the European Council will urge the parliament on Friday to adopt the BRRD and the Deposit Guarantee Directive by the end of the year, draft conclusions of their meeting, seen by Reuters, showed.

The leaders will also set an end-year deadline for euro zone ministers to move on to the next step, by agreeing on how they want the SRM to work, according to the draft conclusions.

That common position on the SRM would also have to go through the European Parliament – and time is short because the last parliamentary session before elections is in mid-April.

The European Council “underlines the commitment to reach a general approach by the Council (of ministers) on the Commission’s proposal for a Single Resolution Mechanism by the end of the year in order to allow for its adoption before the end of the current legislative period,” the conclusions said.

The European Commission, the EU executive arm, has proposed that it should be the single resolution authority – an idea that Germany opposes.

TESTS, BACKSTOPS, REFORMS AND REWARDS

Meeting all the deadlines appears ambitious, but it would allow the single resolution authority and its fund, which is to be financed from contributions from the banking sector, to become operational in early 2015 – an date favoured by the ECB.

Before the ECB takes over its supervisory duties, it wants to check all the banks’ financial health, by estimating the value of their assets under various adverse scenarios.

Because policy-makers expect the ECB check to show that some banks need more capital, EU leaders will reiterate that governments should be prepared to help if a bank cannot raise additional funds from the market.

“Member states should make all appropriate arrangements, including national backstops, applying state aid rules,” the draft conclusions said.

EU leaders also want to flesh out in December a plan for euro zone countries to sign contracts with European institutions, promising to bring in reforms to make their economies more stable. Under the scheme, countries would get money if they deliver.

“Work will be carried forward to strengthen economic policy coordination, including by agreeing in December on the main features of contractual arrangements and of associated solidarity mechanisms,” the draft conclusions said.

Some policy-makers are sceptical about such contracts, mainly because no money has yet been set aside for “solidarity mechanism”.

Cash-strapped governments would be reluctant to create a new fund of a meaningful size on top of their existing commitments to the EU-wide long-term budget.

“These contractual arrangements are extremely unattractive because they are either not possible to finance or they are a bit condescending – it is a bit like telling the kids what to do and then giving them some pocket money,” one senior policy-maker said.

Related:

Hmmm....Is Luxemburg next? Luxembourg Warns of Investor Flight from Europe

"Euro heist II" - Poland Confiscates Half Of Private Pension Funds To Cut Sovereign Debt Load.

"Euro heist II" - Poland Confiscates Half Of Private Pension Funds To Cut Sovereign Debt Load.HT: ZeroHedge.

While the world was glued to the developments in the Mediterranean in the past week, Poland took a page straight out of Rahm Emanuel’s playbook and in order to not let a crisis go to waste, announced quietly that it would transfer to the state – i.e., confiscate – the bulk of assets owned by the country’s private pension funds (many of them owned by such foreign firms as PIMCO parent Allianz, AXA, Generali, ING and Aviva), without offering any compensation. In effect, the state just nationalized roughly half of the private sector pension fund assets, although it had a more politically correct name for it: pension overhaul.

By way of background, Poland has a hybrid pension system: as Reuters explains, mandatory contributions are made into both the state pension vehicle, known as ZUS, and the private funds, which are collectively known by the Polish acronym OFE. Bonds make up roughly half the private funds’ portfolios, with the rest company stocks.

And while a change to state-pension funds was long awaited – an overhaul if you will – nobody expected that this would entail a literal pillage of private sector assets.

On Wednesday, Prime Minister Donald Tusk said private funds within the state-guaranteed system would have their bond holdings transferred to a state pension vehicle, but keep their equity holdings. The funds would effectively be left with only the equities portions of their assets, even this would be depleted, and there will be uncertainty about the number of new savers joining.

But why is Poland engaging in behavior that will ultimately be disastrous to future capital allocation in non-public pension funds (the type that can at least on paper generate some returns as opposed to “public” funds which are guaranteed to lose)?

 After all, this is a last ditch step which no rational person would engage in unless there were no other option. Simple: there were no other option, and the driver is the same reason the world everywhere else is broke too – too much debt.

By shifting some assets from the private funds into ZUS, the government can book those assets on the state balance sheet to offset public debt, giving it more scope to borrow and spend. Finance Minister Jacek Rostowski said the changes will reduce public debt by about eight percent of GDP. This in turn, he said, would allow the lowering of two thresholds that deter the government from allowing debt to raise over 50 percent, and then 55 percent, of GDP. Public debt last year stood at 52.7 percent of GDP, according to the government’s own calculations.

To summarize:

1. Government has too much debt to issue more debt
2. Government nationalizes private pension funds making their debt holdings an “asset” and commingles with other public assets
3. New confiscated assets net out sovereign debt liability, lowering the debt/GDP ratio
4. Debt/GDP drops below threshold, government can issue more sovereign debt

And of course, once Poland borrows like a drunken sailor using the new window of opportunity, and maxes out its new and improved limits, it will have no choice but to confiscate more assets, and to make its balance sheet appear better, until one day, there is nothing left in the private sector to confiscate. At that point the limit itself will have to be legislated away, and Poland will simply continue borrowing until one day there are no foreign lenders willing to take the same risk as the nation’s private pensioners. At that point, Poland, which is in the EU but still has the Zloty, can just go ahead and monetize its own debt by printing unlimited amounts of its currency.

Of course, we all know how that story ends.

The response to the confiscation was, naturally, one of shock:

The reform is “a decimation of the …(private pension fund) system to open up fiscal space for an easier life now for the government,” said Peter Attard Montalto of Nomura. “The government has an odd definition of private property given it claims this is not nationalisation.”

“This is worse than many on the markets had feared,” a manager at one of the leading pension funds, who asked not to be identified, told Reuters.

“The devil is in the detail and we don’t yet know a lot about the mechanism of these changes, what benchmarks will be use to evaluate our performance… (It) looks like pension funds will lose a lot of flexibility in what they can invest.”

Catastrophic consequences for fund flows aside, the Polish prime minister had a prompt canned response:

Tusk said people joining the pension system in the future would not be obliged to pay into the private part of the system. Depending on the finer points, this could mean still fewer assets in the private funds.

“The (current) system has turned out to be built in part on rising public debt and turned out to be a very costly system,” Tusk told a news conference.

“We believe that, apart from the positive consequence of this decision for public debt, pensions will also be safer.”

You see, he is from the government, and he is confiscating the pensions to make them safer. Confiscation is Safety and all that…

Polish officials have tried to reassure investors, saying the overhaul avoids the more radical options of taking both bond and equity assets away from the private funds outright.

They say the old system effectively made Polish public debt appear higher than it really is.

Well, once you nationalize private assets, the public debt will lindeed appear lower than it was before confiscation: we give them that much.

End result: “The Polish pension funds’ organisation said the changes may be unconstitutional because the government is taking private assets away from them without offering any compensation…. This may lead to the private pension systems shutting down,” said Rafal Benecki of ING Bank Slaski.”

Unconstitutional? What’s that. But whatever it is, it’s ok – after all the public pension system is still around. At least until that too is plundered. But in the meantime, all such pensions will be “safer”, guaranteed.

But best of all, in the aftermath of Cyprus, we now know what the two most recent European blueprints for preserving the myth of solvency are: bail-ins, which confiscate deposits, and pension fund “overhauls”, which confiscate, well, pension funds.

And now, back to the global recovery soap opera.

Timothy Geithner Is Key To IRS Scandal.

Timothy Geithner Is Key To IRS Scandal.HT: TestosteronPit.By Chris Street.

Acting IRS Commissioner Steven T. Miller was forced by to resign, predominantly due to the July 7, 2011 memorandum that I published last weekend in my report, IRS HAD ENEMIES LIST IN 2010 & 2012. The document, written on U.S. Treasury Department stationary, demanded that senior IRS management terminate attempts to have donations to selected tax-exempt groups be fully taxed as gifts.
The IRS admitted the groups examined were conservative, such as Tea Parties. The Miller memo appeared to confirm that he knowingly lied to Congress while under oath at least twice last year about predatory audits of conservative organizations. But Mr. Miller has told the press he is only resigning when his “acting assignment ends in early June.”
I was suspicious Mr. Miller’s resignation was an effort to prevent him from being required to testify again under oath on Friday to three Congressional Committees. But if Mr. Miller is staying until June, he must testify on Friday.
With the President throwing the IRS Commissioner “under the bus,” Mr. Miller may be ready to throw former Treasury Secretary Timothy Geithner and President Obama under the bus.

Steven T. Miller is a career civil servant at the IRS. He holds a Juris Doctorate law degree from George Washington University and a Master of Laws in taxation from Georgetown University. He has held several senior positions at the IRS and worked for a number of years as an attorney in the IRS Chief Counsel’s office. He also served as a Congressional staff member for the Joint Committee on Taxation. Holding prestigious law degrees and having given harsh warnings to senior IRS staff in 2011 to ban predatory examinations, it is doubtful Mr. Miller would have authorized continued examinations unless ordered to by his direct boss, former IRA Commissioner Douglas H Shulman.
Douglas H. Shulman was nominated by Republican President George W. Bush  and confirmed by the Senate as IRS Commissioner on Friday March 14, 2008 at the youthful age of 41. Mr. Shulman formerly served as the Vice Chairman of the Financial Industry Regulatory Authority (FINRA), at an even more youthful age, where he made a name for himself working closely with New York Federal Reserve Bank President Timothy Geithner, pioneering over-the-counter trading of derivatives by banks. As IRS Commissioner, he reported directly to Timothy Geithner as U.S. Treasury Secretary.
Over the next four days after his confirmation, the legendary Bear Stearns Brokerage firm collapsed, heralding the beginning the worst recession since the Great Depression. The U.S. Federal Reserve was required to take responsibility for $29 billion in toxic sub-prime assets from Bear Stearns' portfolio. As the FINRA whiz-kid he was the regulatory architect that championed banks and brokerage firms’ taking on sub-prime asset leverage. Douglas Shulman again showed incredible timing for avoiding horrific personal blame for scandal by resigning on November 9, 2012, a day after the reelection of President Barack Obama.
By the time Barack Obama came into office in January of 2009, real estate was collapsing, the stock market was down by 40% and unemployment was about to vault to over 10%. President Obama summed up his opinions of leveraged banks on CBS's “60 Minutes” stated: “I did not run for office to be helping out a bunch of fat cat bankers on Wall Street.” Mr. Obama went on to say: “They're still puzzled why it is that people are mad at the banks. Well, let's see. You guys are drawing down $10, $20 million bonuses after America went through the worst economic year that it's gone through in—in decades, and you guys caused the problem. And we've got 10% unemployment.”
It was always baffling to me that IRS Commissioner Douglas Shulman had managed to convince the President to not demand his resignation as punishment for his dubious leadership at FINRA that contributed to the financial crisis. As IRS Commissioner, Mr. Shulman must have received a copy of Deputy Commissioner for Services and Enforcement Steven T. Miller's memo of July 7, 2011 that screamed the audits and examinations had: “significant legal, administrative and policy implications with respect to which we have little enforcement history.” It is documented President Franklin Roosevelt used the IRS to investigate and intimidate his political enemies, so IRS Commissioner Shulman must have known that Mr. Miller was concerned the retaliation against conservative groups exceeded FDR’s using the IRS against political enemies.
The IRS continues to mislead the public, as Fox News reported that at least 471 tax-exempt organizations, not the 300 admitted to by the IRS, were examined with “extra scrutiny.” 
Then Treasury Secretary Timothy Geithner must have received a copy of the 2011 Miller memo, because it was written on Department of Treasury stationary and Shulman and Miller reported to him.

 Therefore, to find out if the IRS has been running a massive enemies list for the White House, Congress must demand that Timothy Geithner testify under oath.

Harry Truman said that he took personal responsibility for the actions of his Administration’s by saying: “Buck stops here.” Barack Obama said at his Benghazi press conference “there is no there, there.” The question the American people want to know about any illegal use of the IRS for political purposes, “Is there any here, here?” By Chriss Street.
During their second term, Presidents not only get tangled up in scandals but also become obsessed with “legacy.” This includes their performance as measured by the stock market. Many people can relate to it. Retirement depends on it. Outside of a few shorts, everyone wants it to go up. But President Obama must be biting his fingernails down to the quick.Read the full story here.

Obama picks high-level fundraiser 'Goldman Sachs exec' for ambassador to Canada.

Obama picks high-level fundraiser 'Goldman Sachs exec' for ambassador to Canada.(CBC).U.S. President Barack Obama has selected a partner at the investment firm of Goldman Sachs in Chicago to be the new U.S. ambassador to Canada, CBC News has learned.

Sources tell CBC News Network's Power and Politics that Bruce Heyman has accepted the job but still has to pass a vetting process in order to be be formally nominated. His confirmation will be up to the U.S. Congress.

If he is approved, Heyman would replace David Jacobson, who has held the position since 2009. Jacobson is also from Chicago.

Well known as a high-level fundraiser to Barack Obama, Heyman and his wife Vicki, also a fundraiser, raised more than $1 million for Obama and were on his national finance committee.

Heyman runs the private wealth fund at Goldman Sachs and his areas of responsibility include parts of Canada.

Sources tell CBC News that although Heyman is Obama's top choice he still has to pass a rigorous vetting process.

Another powerful Chicago fundraiser for Obama, Penny Pritzker, was reported to be Obama's pick for Commerce secretary four years ago but pulled out during the vetting process. Pritzker is now being mentioned again as Obama's likely nominee for Commerce.Hmmmm....."Chicago politics" - The most corrupt admin evah!Read the full story here.

Hmmm....Is Luxemburg next? Luxembourg Warns of Investor Flight from Europe

Hmmm....Is Luxemburg next? Luxembourg Warns of Investor Flight from Europe.(Spiegel).
The debate over this week's "bail in" of bank account holders in Cyprus as part of the country's debt crisis bailout is continuing to simmer in Europe. In Luxembourg, Finance Minister Luc Frieden has warned that the example set in Cyprus by taxing people holding €100,000 ($129,000) or more in their accounts could drive investors out of Europe.

"This will lead to a situation in which investors invest their money outside the euro zone," he told SPIEGEL. "In this difficult situation, we need to avoid anything that will lead to instability and destroy the trust of savers."

Earlier this week, Euro Group President Jeroen Dijsselbloem sparked an enormous controversy after stating that the solution found in Cyprus could be applied throughout the euro zone in the future.

The remark triggered immediate criticism from his predecessor as head of the Euro Group, Luxembourg Prime Minister Jean-Claude Juncker. "It disturbs me when the way in which they tried to resolve the Cyprus problem is held up as a blueprint for future rescue plans," Juncker told German public broadcaster ZDF earlier this week. "It's no blueprint. We should not give the impression that future savings deposits in Europe might not be secure. We should not give the impression that investors should not keep their money in Europe. This harms Europe's entire financial center."

Hmmmm.....yesterday Reuters: "Hands off our banking sector, Luxembourg tells euro zone." seems they know they're on the 'Hit List'.Read the full story here.

Related: MFS on Wednesday - "The Great Euro Bank Robbery" - Hands off our finance sector, Luxembourg warns

Hmmmm.....As i wrote on Monday: Reading material Here:

Euroclear Bank is subject to effective regulation, supervision and oversight of the NBB and FSMA, but cooperation with the Luxembourg authorities should be improved.

The legal framework provides the Belgian authorities with sufficient powers to obtain timely information and induce change.
However, as Euroclear Bank is in competition with the Luxembourg based Clearstream Banking Luxembourg—which offers similar settlement and banking services––close cooperation with the Luxembourg authorities is needed to avoid any competition on risk management frameworks.

As both entities are highly relevant for the global financial stability the Belgian and Luxembourg authorities should evolve from the existing cooperation towards a cooperative framework that would allow them to take common decisions and implement these simultaneously in both entities.

The plans to include Euroclear Bank on the list of eligible banks for the SSM may further contribute to a level playing field.

77. The national securities depositories of Belgium, France, and the Netherlands, that share a common IT platform provided by the Euroclear Group, are subject to effective regulation, supervision, and oversight of the Belgian, Dutch, and French authorities, despite the fact that the legal frameworks differ substantially between the three countries. The cooperation between the different authorities is effective and contributes to the financial stability in Belgium, France, and the Netherlands. Crisis management frameworks are in place that are regularly tested and updated

Video - Ezra levant "Eurozone fail."

"Happy Easter" The EU Took €100 Million from the Cypriot Greek Orthodox Church.

"Happy Easter" The EU Took €100 Million from the Cypriot Greek Orthodox Church.(Cyprus Mail).

This so-called “bail-in” designed only to protect the hedge funds of the European and British money center banks scalped the one entity which could help the poor during the nations transition from quasi-capitalism to European serf state. From the article in today’s paper:

The Church stands to lose more than 100 million euros in the bailout deal reached with international creditors early Monday, its leader Archbishop Chrysostomos said.

“The capital owned by the Church, which was over 100 million euros, has been lost,” the archbishop told reporters.

“There will be many difficulties, some will lose their jobs, the hungry will be multiplied and the Church has to take care of people,” he added.

Granted, I’m sure they won’t suffer at the top of the church as in the old Vatican tradition, the Greek Orthodox Church has been known to enjoy ornate lifestyles and investments which per the article range from breweries (yes, that’s correct) to hotels and resorts. The bigger picture is that the European Union using the power of the ECB and IMF combined has now found a formula not just to create vassal states, but to seize the assets of the Church, something the atheistic Marxists which created the Eurozone have fantasized about for over a decade.

This action should make the Vatican extremely nervous about their massive Italian and Spanish property holdings in those nations.

John Galt: When this program is translated into an American version, look for only those “Federally approved” institutions to be exempt from property and capital seizure. Three is no better formula to force a religious institution to pay taxes and force compliance with the political elite’s prevailing point of view to extinguish the concept of freedom of expression.Read the full story here.

"The Great Euro Bank Robbery" - Cyprus Popular Bank’s large deposit holders could face 80% cut.

"The Great Euro Bank Robbery" - Cyprus Popular Bank’s large deposit holders could face 80% cut.(RT).

Cyprus Popular Bank’s richest clients with uninsured deposits over €100,000 could get only 20% of their money, as the government eyes to wind down its operations, says Finance Minister Michalis Sarris.

"Realistically, very little will be returned," Sarris said in a televised interview with state broadcaster CyBC, adding that it could also take years before those depositors see any of their money back.

“Certainly, for depositors above 100,000 euros it could be a very significant blow," Sarris concluded.

Earlier it was reported the losses facing large depositors at Bank of Cyprus could reach as much as 40%.

The island’s second biggest lender, Cyprus Popular Bank (Laiki), has faced the most serious troubles amid the crisis. Its healthy part will merge into the Bank of Cyprus transferring a debt of 9.2 billion euros and leaving around 8 thousand employees in Cyprus and abroad without work.

Russian companies and businessmen, who between 2007 and 2011 transferred around $135 billion to Cyprus seem to be the most affected.

On Wednesday, the Russian state-owned Bank for Development and Foreign Economic Affairs announced plans to work out a way to help Russian firms with money in Cyprus. Usually the bank helps only too-big-to-fail companies.

Meanwhile, the US-based credit agency Moody's has said the Cyprus crisis puts extra pressure on the Eurozone's downgrade-threatened sovereign ratings, and shows policy makers overestimated their ability to contain the crisis. Market analysts fear that could set a dangerous precedent for future rescue efforts and make the region more prone to bank runs if depositors in other debt-strained countries think their money is no longer safe.Hmmmm......At which time will people say "ENOUGH" of that Euro communism?I hope people with deposits in Luxembourg learned their lesson and have an Easter 'banking trip' to Luxembourg. Read the full story here.

"The Great Euro Bank Robbery" - Hands off our finance sector, Luxembourg warns

"The Great Euro Bank Robbery" - Hands off our finance sector, Luxembourg warns.(HD).

Luxembourg railed on Wednesday against what it fears is a new eurozone position that oversized finance sectors must be scaled back in line with national economic output following the Cyprus banking debacle.

Former Eurogroup chairman Jean-Claude Juncker's government is "concerned about recent statements and declarations that were made since the crisis in Cyprus sharpened", a news release said.

Specifically, it rejects "general assessments of the size of the financial sector in relation to a country's GDP (gross domestic product) and the alleged risks this poses for economic and fiscal sustainability".

The government said the Luxembourg finance sector acts as "an important gateway for the euro area by attracting investments and thus contributing to the general competitiveness of all member states".

Juncker's successor as eurozone head, Dutch Finance Minister Jeroen Dijsselbloem, has said that the Cypriot financial sector was too big compared with the country's overall gross domestic product, a problem that has forced Cyprus to break up one Cypriot bank and downsize another in exchange for an international bailout worth 10 billion euros ($13 billion).

While few eurozone economies depend on the banking sector as heavily as Cyprus does, Berenberg Bank economists noted on Monday that bank assets in three other eurozone countries were bigger as a percentage of gross domestic product than in Cyprus, where they amounted to more than 700 percent of GDP in 2011.

In Luxembourg, the percentage was an astounding 2,500 percent, the economists said, while in Ireland they were more than 800 percent and in Malta close to 800 percent. The eurozone average was given as 360 percent.

"The financial sector is oversized compared to the rest of our economy," a senior Luxembourg government official nevertheless told AFP on condition of anonymity.

And yet, European Union Markets Commissioner Michel Barnier was quick to insist earlier this week that "the problem is not Luxembourg -- it was certain banks in Ireland, in Spain, in Portugal." One of six founding members of the EU, Luxembourg is one of just four eurozone states -- alongside Germany, the Netherlands and Finland -- to have maintained a triple-A classification with all three major global credit rating agencies Moody's, Fitch and Standard and Poor's.

Its debt-to-GDP ratio is in the region of 20 percent -- compared to a target 120 percent for bailed-out partners -- and its deficit is well within the regularly-ignored EU threshold of three percent.

Yet Luxembourg has increasingly come under an EU microscope in post-global financial crisis legislative clean-up action, primarily for its culture of banking secrecy.Read the full story here.

Hmmmm.....As i wrote on Monday: Reading material Here:

Euroclear Bank is subject to effective regulation, supervision and oversight of the NBB and FSMA, but cooperation with the Luxembourg authorities should be improved.

The legal framework provides the Belgian authorities with sufficient powers to obtain timely information and induce change.
However, as Euroclear Bank is in competition with the Luxembourg based Clearstream Banking Luxembourg—which offers similar settlement and banking services––close cooperation with the Luxembourg authorities is needed to avoid any competition on risk management frameworks.

As both entities are highly relevant for the global financial stability the Belgian and Luxembourg authorities should evolve from the existing cooperation towards a cooperative framework that would allow them to take common decisions and implement these simultaneously in both entities.

The plans to include Euroclear Bank on the list of eligible banks for the SSM may further contribute to a level playing field.

77. The national securities depositories of Belgium, France, and the Netherlands, that share a common IT platform provided by the Euroclear Group, are subject to effective regulation, supervision, and oversight of the Belgian, Dutch, and French authorities, despite the fact that the legal frameworks differ substantially between the three countries. The cooperation between the different authorities is effective and contributes to the financial stability in Belgium, France, and the Netherlands. Crisis management frameworks are in place that are regularly tested and updated.

UKIP leader Nigel Farage: "Europe is now in the grip of fanatics, I don’t just want Britain out of the EU, I want the rest of Europe out of the EU.”

UKIP leader Nigel Farage: "Europe is now in the grip of fanatics, I don’t just want Britain out of the EU, I want the rest of Europe out of the EU.”HT: TundraTabloids.

There can’t be many senior politicians who are able to pack a hall on a freezing, snowy night and then, when the meeting’s over, roll into the local pub and hold fort at the bar for the next hour and a half.

Step forward, Nigel Farage, leader of the UK Independence Party.

It was standing room only at the Brandon Community Hall in Suffolk. More than 300 people crammed into the room. Another 20 or 30 people stood in the corridor straining to listen and the police were called to direct the traffic.

“I thought UKIP was only for eccentrics, fruitcakes and gadflies, so I’m glad so many of you are members of the club,” joked Mr Farage, referring to a comment by Prime Minister David Cameron, while pushing his way to the front.

Mr Farage is not going to let that one go in a hurry and Mr Cameron’s words must be ringing in his ears when an events like this attract so much attention.“The fact that there are so many of you here shows that there’s a change going on.”

The UKIP leader believes that the Westminster parties have lost touch with the concerns and aspirations of ordinary people and he thinks UKIP can fill the gap.

“We’re plain spoken, we’re not bound by political correctness and we’re talking about the kind of things that people are talking about around their dining room tables,” he told us later.

 "Europe is now in the grip of fanatics," said the MEP. "I don't just want Britain out of the EU, I want the rest of Europe out of the EU." Mr Farage criticised the deal to rescue the Cyprus economy, involving a levy on bank deposits. "It is deeply worrying and sets a dangerous precedent," he said and advised anyone with a second home in Europe or savings in a European bank to think very carefully.Read the full story here.

Overseas lending, bank exposure to Cyprus around $100 billion: BIS, Moody's.

Overseas lending, bank exposure to Cyprus around $100 billion: BIS, Moody's.(Reuters).(Compiled by Steve Slater, Marc Jones and Edward Taylor; Editing by David Cowell). Overseas lenders, excluding those in Russia, had $59.2 billion of outstanding loans to Cyprus at the end of September, according to Bank for International Settlements (BIS) data.

BIS statistics, the only ones to chart cross-border lending around the world, do not include loans from Russia. Ratings agency Moody's estimates Russian bank loans to Cyprus-based companies of Russian origin were $30-40 billion.

The BIS data show lenders from Greece and Germany have the biggest exposures to Cyprus of the reporting countries.

Cyprus on Monday reached a 10 billion euro ($13 billion) rescue plan to avoid economic meltdown after more than a week of intense scrutiny on the island's future.

Some banks disclose their loans to Cyprus, but the European Banking Authority has not forced banks to release a breakdown since a 2011 stress-test.Read the Full story here.

COUNTRY EXPOSURE TO CYPRUS (in Billions of dollars)

Russia* 30-40

Greece 16.4

Germany 7.6

France 2.5

Switzerland 2.2

United Kingdom 2.2

Netherlands 1.9

Austria 1.7

United States 1.7

Italy 1.6

Sweden 1.4

'до свидания' - Have The Russians Already Quietly Withdrawn All Their Cash From Cyprus?

'до свидания' - Have The Russians Already Quietly Withdrawn All Their Cash From Cyprus?(ZeroHedge).By Tyler Durden.

Yesterday, we first reported on something very disturbing (at least to Cyprus' citizens): despite the closed banks (which will mostly reopen tomorrow, while the two biggest soon to be liquidated banks Laiki and BoC will be shuttered until Thursday) and the capital controls, the local financial system has been leaking cash. Lots and lots of cash.
Alas, we did not have much granularity or details on who or where these illegal transfers were conducted with. Today, courtesy of a follow up by Reuters, we do.
The result, at least for Europe, is quite scary because let's recall that the primary political purpose of destroying the Cyprus financial system was simply to punish and humiliate Russian billionaire oligarchs who held tens of billions in "unsecured" deposits with the island nation's two biggest banks.
As it turns out, these same oligrachs may have used the one week hiatus period of total chaos in the banking system to transfer the bulk of the cash they had deposited with one of the two main Cypriot banks, in the process making the whole punitive point of collapsing the Cyprus financial system entirely moot.
From Reuters:

While ordinary Cypriots queued at ATM machines to withdraw a few hundred euros as credit card transactions stopped, other depositors used an array of techniques to access their money.

No one knows exactly how much money has left Cyprus' banks, or where it has gone. The two banks at the centre of the crisis - Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus - have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia's Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks' largest depositors.

So while one could not withdraw from Bank of Cyprus or Laiki, one could withdraw without limitations from subsidiary and OpCo banks, and other affiliates?
Just brilliant.
And if there was any doubt that the entire process of destroying one entire nation was simply to punish Cyprus, it can be completely cleared away now:

ECB officials contacted Latvia, another EU country that has received large Russian deposits, to warn authorities against taking in Russian money fleeing Cyprus, two sources familiar with the contacts said.

"It was made clear to our Latvian friends that if they want to join the euro, they should not provide a haven for Russian money exiting Cyprus," a euro zone central banker said.

If one thinks there is any material Russian cash therefore left in Cyprus with this epic loophole in place, we urge them to make a deposit in the insolvent nation. One person who certainly will not be allocating any of his money into Bank of Cyprus is German FinMin Schaeuble:

German Finance Minister Wolfgang Schaeuble said the bank closure had limited capital flight but that the ECB was looking closely at the issue. He declined to provide figures.

Perhaps because if he did, it would become clear that the only entities truly punished by this weekend's actions are not evil Russian billionaires, but small and medium domestic companies, and other moderately wealthy individuals, hardly any of them from the former "Evil Empire."

Companies that had to meet margin calls to avoid defaulting on deals were granted funds. Transfers for trade in humanitarian products, medicines and jet fuel were allowed.

The stealth withdrawals by Russians of course means that the two megabanks are now utterly drained of capital, and that the haircuts on those who still have unsecured deposits with the two banks will be so big it will likely mean a complete wipeout of all deposits. As in 0% recovery on your deposits!
In other words, by now any big Russian funds in Cyprus are long gone, and the only damage accrues to the locals: for one reason because their money over the critical EUR100K threshold has been "vaporized", and for another because the marginal driving force and loan demand creator in Cyprus, the Russians, are gone and are never coming back again.
This is what passes for monetary real-politik in the New Normal - an entire nation becomes collateral when pursuing a wealthy group of people. And the "wealthy group" is victorious in the end despite everything...
If we were Cypriots at this point we would be angry. Very, very angry.Read the full story here.

Matt O’Brien‏@ObsoleteDogma

Cyprus is done as a tax haven. Latvia has been warned to stop if it wants to join the euro. Luxembourg & Malta know they could get Cyprus’d.



Reading material Here:

Euroclear Bank is subject to effective regulation, supervision and oversight of the NBB and FSMA, but cooperation with the Luxembourg authorities should be improved.

The legal framework provides the Belgian authorities with sufficient powers to obtain timely information and induce change.
However, as Euroclear Bank is in competition with the Luxembourg based Clearstream Banking Luxembourg—which offers similar settlement and banking services––close cooperation with the Luxembourg authorities is needed to avoid any competition on risk management frameworks.

As both entities are highly relevant for the global financial stability the Belgian and Luxembourg authorities should evolve from the existing cooperation towards a cooperative framework that would allow them to take common decisions and implement these simultaneously in both entities.

The plans to include Euroclear Bank on the list of eligible banks for the SSM may further contribute to a level playing field.

77. The national securities depositories of Belgium, France, and the Netherlands, that share a common IT platform provided by the Euroclear Group, are subject to effective regulation, supervision, and oversight of the Belgian, Dutch, and French authorities, despite the fact that the legal frameworks differ substantially between the three countries. The cooperation between the different authorities is effective and contributes to the financial stability in Belgium, France, and the Netherlands. Crisis management frameworks are in place that are regularly tested and updated.

Cyprus Fallout: Moscow Accuses Euro Zone of Theft -- and Worse.

Cyprus Fallout: Moscow Accuses Euro Zone of Theft -- and Worse.(Spiegel).

Russia has sharply criticized the bailout deal for Cyprus, with Prime Minister Dmitry Medvedev accusing the EU of theft. Russian state television even likened the forced levy imposed on wealthy investors -- many of them Russian -- to the expropriation of Jews by Nazi Germany.

The verdict of Russian state television on Europe's effort to save Cyprus was damning. The last week "will enter the history books of the EU as a destructive one," said Dmitry Kiselev, the presenter of the popular news program Vesti Nedili on the Rossiya channel.

Kiselev heaped criticism on the forced levy to be imposed on bank deposits in Cyprus. He said the last time a Western European government proceeded so recklessly was when Adolf Hitler expropriated the Jews.
Nazi propaganda at the time described the money held by Jewish people as "dirty," said Kiselev. That was precisely how Europe was talking about Russian assets deposited in Cyprus, he added.

"The new world order is being founded against Russia, at Russia's costs and on the rubble of Russia," said a Rossiya correspondent from the Mediterranean island nation.

The Kremlin feels it has been sidelined in the tug-of-war over the Cypriot bailout, European Commission President José Manuel Barroso visited Moscow for talks last Friday, but just a few days later, Europe's new attempt to avert a financial meltdown in Cyprus has elicited fierce criticism from Moscow. Read the full story here.

"Dijselbloem and the Forty Euro Thieves? - "Cyprus Deal Is A New Template."

"Dijselbloem and the Forty Euro Thieves? - "Cyprus Deal Is A New Template."(IW).

Today, in an interview with Reuters and the Financial Times, Dutch Finance Minister and President of the Eurogroup of euro zone finance ministers Jeroen Dijsselbloem said that the Cyprus deal will serve as a template for future bank restructurings in the euro zone.

Reuters reporter Luke Baker has the scoop:

"What we've done last night is what I call pushing back the risks," Dutch Finance Minister Jeroen Dijsselbloem, who heads the Eurogroup of euro zone finance ministers, told Reuters and the Financial Times hours after the Cyprus deal was struck.

"If there is a risk in a bank, our first question should be 'Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?' If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders," he said.

European bank stocks are extending their losses today on the news.However, that appears to be somewhat by design.

FT correspondent Peter Spiegel published more comments from the interview with Dijsselbloem that seem to indicate this:

But he said that investor skittishness could ultimately make the financial sector healthier since it would raise the cost of financing for unsound banks.

“If I finance a bank and I know if the bank will get in trouble, I will be hit and I will lose money, I will put a price on that,” Mr Dijsselbloem said. “I think it is a sound economic principle. And having cheap money because the risk will be covered by the government, and I will always get my money back, is not leading to the right decisions in the financial sector.”

In short, though euro area leaders have stressed that the Cyprus deal was a special case, it's becoming increasingly clear in the wake of negotiations that this is the new normal for euro zone bank restructurings.Hmmmm.......Sounds like Government bonds are to become worthless, after they first 'Forced' the pension funds in Europe to invest at least 20% of their assets in Gov Bonds of their country of origin. Read the full story here, more here.

Interesting reading material here.

In our view, two more elements are necessary to stabilize the shaky foundations of the Euro. First, some sovereigns are undoubtedly insolvent. A credible, orderly, bankruptcy procedure for sovereigns that minimizes the risk of contagion is needed.
Second, the financial system of the Eurozone is too fragile and contains too many systemically risky institutions.A Eurozone(wide banking resolution regime,able to prevent contagion and protect European depositors, must be put in place.)

Video - Cyprus vs Bankocracy: 'Mattress better place to keep cash than banks'

'Without big banks, socialism would be impossible.' – Vladimir Lenin

Germany warns Cyprus its banks may NEVER reopen as Russia 'offers to write off debt if Gazprom get access to untapped oil fields'.

Germany warns Cyprus its banks may NEVER reopen as Russia 'offers to write off debt if Gazprom get access to untapped oil fields'.(DM).Germany's warning came after Cyprus's parliament overwhelmingly rejected a proposed levy on bank deposits as a condition for a European bailout of 10 billion euros (£8.6bn) last night.

German Chancellor Angela Merkel said it was up to the Cypriot government to come up with an alternative proposal but it was fair to expect savers with deposits over 100,000 euros (£86,000) to contribute to the bailout.

Moscow is now a massive ally for Cyprus - Cypriot Finance Minister Michael Sarris said he had not reached a deal at a first meeting today with his Russian counterpart Anton Siluanov, but talks there would continue.

... Russia's finance ministry said Nicosia had sought a further 5 billion euros, on top of a five-year extension and lower interest on an existing 2.5 billion euro loan.

Moscow was angered that the European Union did not consult it over the proposed levy.

President Vladimir Putin called the decision to seize money from savers’ bank accounts as ‘unfair, unprofessional and dangerous’.

Representatives of the Russian energy giant submitted the proposal to the office of Cypriot President Nicos Anastasiades on Sunday evening.

Even the Church of Cyprus offered to help. 'The entire wealth of the Church is at the disposal of the country ... so that we can stand on our own two feet and not on those of foreigners,' Archbishop Chrysostomos said after meeting Anastasiades early today. The Church of Cyprus is a major shareholder in Cyprus's third-largest domestic lender, Hellenic Bank.

It is also rumoured that the Kremlin is privately offering to help bail out Cyprus in exchange for the right to use a naval base in the Greek part of the island.Hmmmm.......Would be very welcome now that Tartus is 'sinking'.Read the full story here.


Update: Cyprus Fails to Obtain Kremlin Aid.(MT).

Sarris did not manage to negotiate a Russian bailout despite a 1 1/2 hour meeting with his counterpart, Anton Siluanov.

"We had a very good first meeting, very constructive, very honest discussion," he told journalists afterward, Bloomberg reported.

Sarris subsequently attended a second meeting with Deputy Prime Minister Igor Shuvalov, Siluanov and Deputy Finance Minister Sergei Storchak. An undisclosed source told Russian newswires that negotiations had not yielded any results and would continue Thursday.

European Commission President Jose Manuel Barroso is due to visit Moscow on Thursday for scheduled talks.

"We understand how difficult the situation is, and we'll continue negotiations to find the solutions that will help us obtain Russia's support," Sarris said, adding that the Cypriot delegation would remain in Moscow "until we reach any agreement." Read the full story here.

Video - Nigel Farage Message To Europeans: “Get Your Money Out While You Can”

In Nigel Farage’s first TV appearance since the Cypriot wealth tax was announced, the Englishman pulls no punches. In all his years and all his experience of the desperation of the European Union’s leadership “never did [he] think they would resort to stealing money from people’s savings accounts.”

The simple fact is that they know they cannot let any country leave, no matter how small, for “once one country goes, the whole deck of cards will come tumbling down.” There is now “clear irreconcilable differences” between the North and the South of Europe and now that they have done this in one country, “they are quite capable of doing it in Italy, Spain and anywhere.”

The message that sends to people is ”get your money out while you can.” As far as his British constituents, he strongly recommends George Osborne (UK Chancellor) urge ex-pats to remove all their money and do monthly transfers from home. “Do Not Invest In The Euro-Zone,” he concludes,“you have to be mad to do so– as it is now run by people who do not respect democracy, the rule of law, or the basic principles upon which Western civilization is based.”

“They are propping up a Eurozone that, in the end, will collapse in disastrous failure and they are prepared to do anything to do so.”

'Island port for sale' - Cyprus Turns to Russia for €7.5bln Bailout.

'Island port for sale' - Cyprus Turns to Russia for €7.5bln Bailout.(Fars). Cypriot Finance Minister Michailis Sarris arrived in Moscow to hold talks with Russian Finance Minister Anton Siluanov for a 7.5 billion euro bailout. "We're hoping for a good outcome, but we cannot really predict," Sarris told reporters before his meeting with Siluanov, RT reported.

He said Cyprus "is hoping for a good outcome."

Late Tuesday the Cypriot parliament overwhelmingly rejected a proposed tax level on bank deposits as a condition for European bailout aid of 10 billion euro.

Now it is hoping to secure a loan agreement with the Russian Finance Ministry.

Cyprus has asked Russia for a five-year extension loan of 2.5 billion euro ($3.22 bln), as well as an additional 5 billion euro to help curb the crisis in the Mediterranean Island, also a tax haven and home to a significant amount of Russian wealth. Hmmmm......$7.5bln for a port in the Mediterranean sea now that Tartus is going might be a great deal.Read the full story here.

Related: Cyprus Turns to Moscow: Scenarios for a Russian Role in the Bailout

             Island afloat? Cyprus turns to Moscow for cash

Psst .....Cyprus....hint, hint.....Iceland to charge bankers for ‘08 collapse.

Psst .....Cyprus....hint, hint.....Iceland to charge bankers for ‘08 collapse.(HS).The country's prosecutor will announce in the coming days charges against more than a dozen former top bankers, public radio and television RUV and the daily Frettabladid reported.

Iceland's banks went on an international buying binge in the early 2000s fuelled by cheap foreign loans.

But the collapse of the US investment bank Lehman Brothers in September 2008 froze credit markets and Iceland's banks quickly collapsed, plunging the island nation's economy into a deep recession.

Prosecutors will pursue six former executives of Landsbanki for manipulating the bank's share price by lending funds to investors on condition they buy shares, the reports said.

Nine former executives of Kaupthing will also face charges for various schemes to manipulate the share price of what was then the nation's top bank.

The former chief executives of both banks will be among those charged, according to the reports.

Iceland's then prime minister Geir Haarde was last year found guilty of one minor charge but cleared of serious accusations relating to his handling of the banking collapse.

Haarde has argued the government's choice to let the banks fail and repudiate their foreign debts saved the country from bankruptcy.Hmmmm.......Let's hope it becomes the trendsetter for 2013.Read the full story here.

"The Great Bank Robbery" - Cyprus Considers Zero Tax on Smaller Bank Deposits; All Banks Remain Closed.

"The Great Bank Robbery" - Cyprus Considers Zero Tax on Smaller Bank Deposits; All Banks Remain Closed.(BBC).

The Cyprus finance ministry suggests savers holding less than 20,000 euros (£17,000) would be exempt from a bank levy which has caused much alarm.

Amounts between 20,000 and 100,000 euros would face a 6.75% tax. The levy on savings above 100,000 would remain at 9.9%. The levy has enraged Cypriots.

The earlier plan was to tax all savings under 100,000 euros at 6.75%.

…

Fearing a run on accounts, Cyprus has shut its banks until at least Thursday. The local stock exchange also remains closed.

Cyprus’ banks were badly exposed to Greece, which has itself been the recipient of two huge bailouts.

On Monday there were jitters on global markets over Cyprus, amid shock that for the first time in the eurozone crisis ordinary savers would suffer a “haircut” on their bank accounts – a slice of their savings.

Hmmmm.......Now there are 'rumors' of a 15% 'tax'on savings over 500,000 euros.Read the full story here.