March 26, 2013
Sir, in your “Europe gets real – not before time”, March 26, you write that Cyprus “chose a high-risk strategy of living off a banking system far bigger than the state could support…. A metastasized bank sucked in more funds than it could usually deploy at home… and made a big bet on Greek sovereign bonds… with the complicity of leaders and the acquiescence of a population content to live beyond its means”.
Sir, set in the context of the Basel Committee of Banking Supervision having allowed, by means of Basel II, those Cyprus’ banks to hold Greek bonds against only 1.6 percent in capital, meaning authorizing a mindboggling leverage of 62.5 to 1, your statement is frankly a disgrace and an insult to our intelligence.
And let me remind you that in Cyprus, many of the accounts over €100.000 hold the salaries of those who do not have €10.000 and who of course had not the slightest idea about what lunacy some self-appointed bank regulators were up to… as neither did the sophisticated Financial Times... or did you?