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In another article, the FT noted that the EU's agreement on a bond swap for Greece, has had seriously negative consequences for Cypriotic banks, who are among the largest lenders to Greece. The Cypriotic banking sector has assets of about seven times the country's GDP. Cyprus was hit by two further shocks, a political crisis that resulted from the government's attempt to force through an austerity package, and an explosion at the country's largest power plant that killed 13 people. The situation in Cyprus was not quite as bad as in Ireland, but the losses faced by the banks were still very large.
(my emphasis)

Reyjkyavik on the Cicilian Sea?

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Thu Jul 28th, 2011 at 04:35:02 AM EST
[ Parent ]
Heritage foundation: Cyprus information on economic freedom
Cyprus's financial sector is diverse and relatively sound. Regulation and supervision of banking and finance are efficient, and access to credit is not constrained. Financing for domestic and foreign investors is available at market rates. The three dominant banks' lending practices are prudent and conservative. There are no exchange controls and no interest rate ceiling. Cyprus has developed into a center for non-banking offshore activity, facilitated by a competitive tax regime and double-taxation treaties with many countries. The stock exchange is one of the smallest in Europe.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Thu Jul 28th, 2011 at 04:36:56 AM EST
[ Parent ]
"non-banking offshore activity" = corporate letter-boxes.

As DoDo and I saw some time back when looking into a complicated story of oligarch activity in Czech Republic, Slovakia, (Hungary too?): innumerable subsidiaries and screen companies, all with Cyprus addresses.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jul 28th, 2011 at 07:25:05 AM EST
[ Parent ]
And London hedge funds outsourcing some of their functions there.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Thu Jul 28th, 2011 at 08:23:52 AM EST
[ Parent ]
has long been the offshore home of Russian money.

Wind power
by Jerome a Paris (etg@eurotrib.com) on Thu Jul 28th, 2011 at 11:07:13 AM EST
[ Parent ]
HedgeCo.net: Cyprus as a hedge fund epicenter - interview with the cyprus trade commissioner (DECEMBER 10, 2009
There has been a recent focus on financial services and the hedge fund space in Cyprus, the UN went so far as to declare Cyprus the forerunner for the new Luxembourg UCITS model. The government, working closely with a US based consultancy is planning a program geared specifically to hedge funds and financial services sectors in the US market. The program is slated to begin February 2010.

The effort to transform Cyprus into a global hedge fund and asset management epicenter has been in the works for over 5 years, with the aim of providing access to key markets such as the Middle East, the Eastern European region, Asia and Russia. Some of the top hedge funds globally have already established a footprint in Cyprus in an effort to adapt to international standards. As an accesspoint to the EU, Cyprus works for the Pan/European hedge fund model, with worldwide offices and execution from the island.

In an exclusive interview with the Cyprus Trade Commissioner, Aristos Constantine of the Ministry of Commerce, Industry and Tourism, I learned that Cyprus has the lowest corporate tax regime in the whole of the EU, at 10%. Cyprus also has some of the EU's strongest double taxation treaties (DTT), with more than 40 countries worldwide.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Thu Jul 28th, 2011 at 11:34:38 AM EST
[ Parent ]


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