Cyprus Mail
Letters Opinion

A bail-out would have done much less damage than the bail-in

George Koumoullis in his article on the financial crisis on October 22, suggests that “there was no way the haircut on Cyprus banks could have been avoided”.

Of course, there was a way. A bail-out, instead of a bail-in, would have avoided it as it did in other similar crisis in Greece and elsewhere. Cyprus was the only country subject to a bail-in, hence the haircut.

He also suggests that the earlier first proposal for a milder haircut would not have been preferable since it would have impacted consumer spending. I disagree, the actual later and much heavier haircut on deposits with the resulting partial shut-down of the banks and long lines of Cypriots at ATM’s trying to get their money severely damaged consumer confidence and spending.

It also inflicted long term damage on the island’s banking system and its reputation, contributing to the island’s number one economic problem today, the high level of non-performing loans.

Dr Jim Leontiades, Nicosia

Related posts

Our View: Admission that ministry has no Covid data analysis is astonishing

CM: Our View

Our View: Government should have been prepared for grain crisis

CM: Our View

The word, the flesh and the devil

CM Guest Columnist

Our View: Public sector pensions need overhaul without delay

CM: Our View

Our View: Courts should stay clear of party squabbles

CM: Our View

It’s time to replace the guarantor powers

Christos Panayiotides


Comments are closed.