A rescue plan, agreed to Cyprus will become as processing future in the euro zone crisis and the model of other countries, will restructure its banking sector, responsible for the region's finance ministers said.
This method will mark the eurozone policy according to the fundamental of three years after a crisis, taxpayers in the region, in fact, already on the hook to the bank and indebted governments to solve the problem through a variety of rescue package.
Last night "what we do is what I call TuiBei risk," the Dutch finance minister JiRong Dijsselbloem, who is in charge of the eurogroup of euro zone finance ministers, told Reuters news agency and the British "financial times" on Monday, hours later, the deal was shocked.
"If there is a risk of the bank, we should first question is:" well, what do you do in the bank is that, you can do yourself recapitalisation? ". If a bank cannot do this, then we will discuss to the shareholders and bondholders, we will ask them to make a contribution to the capital of Banks, and uninsured depositors when necessary, "he said.
Cyprus with the eu and the IMF after 12 hours of talks, agreed to shut down its second-largest bank, deposit insurance - less than 100000 euros Cyprus - moved over to the bank, the country's largest bank. Uninsured deposits, these account for more than 100000 euros, with 420 billion euros in losses.
Uninsured depositors in the bank of Cyprus has their own account is frozen, and bank restructuring and capital structure adjustment. Will draw any capital, is the need to strengthen the bank accounts of more than 100000 euros.
The agreement is referred to as a "rescue", and the restructuring of the shareholders and creditors are forced to bear the cost first, followed by uninsured deposits at the bank. Under eu rules, to 100000 euros of deposits guaranteed.
Three years in the government and taxpayers bear the cost, and provide braking, must stop and Dijsselbloem said. Recent calm in financial markets means that now is the time to make a change, however, he admitted that, there are concerns that it may disrupt the market again.
"If we want to have a healthy, sound financial department, the only way is to say, 'you see, there you take risks, you must deal with these problems, and if you can't deal with these problems, so you shouldn' t have them," he said.
"Consequences may be because it's the end of the story, this is a way, I think, we are now hot crisis, what we should do."
Trading after a morning rally behind Cyprus, Dijsselbloem comments knocked down to red, and European stock markets safe haven German bund futures.
"Crisis fade out now, I think we need to deal with this problem, dare to be a bit more," he said.
If passed, the euro zone, the bold plan hatched 9 months ago, when the euro zone debt crisis threatened to blow up the currency can also sound the death knell of separately.
Then, euro zone leaders agreed that the future of the eu bailout fund should be allowed to directly to the Banks, thereby breaking the tottering Banks and weak governments, the connection between the weak force them out of trouble. Now may never happen.
When asked what is the new method means that the euro zone countries' Banks highly leveraged sectors, such as Luxembourg, Malta, and Banks in other countries, such as Slovenia, Dijsselbloem said that they will have to shrink the bank.
"This means you'll be in trouble before processing, strengthen bank, repair balance sheets, and realized that, if Banks into trouble, the response will no longer automatically, we will come to take your questions. 'going to put them back. This is the first response, we need to put them back. You deal with these problems."
The ESM
Significant Dijsselbloem attitude change, agree with the European Union policymakers is a strategic shift, have consequences, how bank recapitalization and reaction in financial markets.
The euro zone has more than one of the major steps in the past three years has set up a rescue mechanism, and guarantee to pay the total amount of up to 700 billion euros - the European stability mechanism.
Is expected, the ESM will be able to directly run into trouble, from 2014 years period, the European central bank (ECB) a comprehensive supervision and all Banks in the area of capital restructuring, the eurozone Banks.
The ESM and direct target capital structure adjustment is indebted governments and Banks between departments to break the so-called "doom loop." Now, Dijsselbloem said, the purpose is for the ESM has never been used.
"Our goal is to be in a situation, we will always need to even consider direct capital restructuring," he said.
"If we had more instruments in bail, how far we can go bail and need to recap directly will become smaller and smaller.
"I think this kind of method need to be, let the handle inside the bank with the bank first, in the public funds from the public or any other instrument before end. Banks should basically be enough to save yourself, or at least change or adjust the capital structure itself as much as possible".
Dijsselbloem, 46, who took over in January alone, chairman of the eurogroup, said he discussed the new method with financial market participants, and said that he expects over time, they will adjust to the new system.
"Bail now, we need to track, I am very confident that the market will think this is a sensible, very focused and direct way, rather than a more general way," he said.
", this will force all the financial institutions and investors, believe them, because they must now realize that it might also hurt their risks. Risks that may occur to them."
 
 



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