May 2013
From The Director


With some markets surging of late, you may be feeling a little more confident about the near future. Take care to temper your confidence with caution. Is there a safe place to keep your money anymore? If the recent crisis in Cyprus has proved anything to global investors, it’s that risks always exist. This month, we take a look at the bank crisis in Cyprus. What went wrong and what can we learn from it?

As always, we welcome your feedback. If you have any questions or would like additional information, please do not hesitate to contact your financial advisor. Should you not currently have an advisor at Select, please reply to this email and one of our senior consultants will contact you promptly.

Best Regards,

Imants Katlaps
Managing Director


As you must know, a tiny European nation off the coast of Greece has been making big news in the financial world.

Cyprus has become the latest victim of the Eurozone financial and banking crisis.  A popular haven for offshore investors mostly from Russia, the island has fallen into a downward spiral as its banking sector ballooned to more than seven times the nation's economy, according to James Saft at Reuters.  Banking investments in real estate and Greek debt further weakened the fragile economy.

The bailout

In 2012, just four years after adopting the euro as its national currency, Cyprus became the fifth euro-area nation to seek a bailout.  The deal struck with the EU and International Monetary Fund imposed harsh terms.  At the two biggest banks in Cyprus, extensive levies were enforced on uninsured deposits of more than 100,000 euros and cash withdrawals were severely limited.

The bank robbery

On March 16, 2013, the entire nation went on an “extended bank holiday” – essentially trapping all deposits for nearly two weeks to avoid a bank run...
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