Thursday, March 21, 2013

Turkey Shoot?

It's weird to see Cyprus so prominent in the news, weird but inevitable. The possible domino effect that could take place soon has got me wondering about the kind of country I will find if I decide to return one day.
I've seen a lot of the greed and corruption in the country, but for such a small island, it's unavoidable when you are working in the financial services.
The Co-op bank, not to mention Liaki Bank, which may collapse on Monday, were 'advised' not to buy Greek bonds, but they went ahead anyway. The Liaki Bank board had decided previously to sell a tonne of shares to the Greeks and ultimately passed control into Greek hands. The new CEO from this 'merger' with Greece's Marfin Financial (which started it all) jumped ship when it was discovered he had less than honourable intentions for the future of the Cypriot bank. I'm talking 2006.
I have no idea of the shenanigans of the Bank of Cyprus.
The island should never have adopted the Euro in 2004, but everyone knew it was done as a protection measure, a geo-political shield if you like. But it's come at a higher price than they could have imagined. Watching the events in Greece unfold, the managers I dealt with sipped their espresso with an unsteady wrist movement, and a few silk ties were ruined.
You can't help but wonder if it was set up this way. Now there are vast deposits of gas, and maybe oil, everyone wants a piece of this action, so the game changed again. The perpetual Cyprus problem seems to have shifted. When the EU and Russia cut Cyprus loose, what will it be, a Turkey shoot?
The Finance Minster Michalis Sarris was 'thrown out' back in 2008, and many in the banking community thought it was a mistake. Quite surreal to see him turn up in Moscow looking for help on behalf of the country in 2013! I guess the newly elected president has something to do with it.
Again, let's not forget some of the other things that precluded this Cyprus meltdown. I wrote about it in a few previous posts...
Here's another link if you are interested in reading some more up-to-date and indepth commentary on the whole Cyprus financial mess ....

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