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20 Mar 2013
Forex Flash: Global markets calm in light of Cypriot debacle - BBH
FXstreet.com (Barcelona) - Brown Brothers Harriman analysts note that the global capital markets have reacted calmly to the Cyprus rejection of the terms of the EUR10 bln aid package.
They add that there is an ECB meeting today, which the Cypriot Central Bank Governor is not attending. They feel that the immediate issue is that without an agreement, should the ECB continue to allow Emergency Lending Credit to be extended to Cypriot banks. They write, “It had previously threatened to cut it off as of by tomorrow. This was the hard place on the other side of the rock of the conditionality which included a tax on all depositors that Cyprus found itself in over the past weekend.”
They add that there is an ECB meeting today, which the Cypriot Central Bank Governor is not attending. They feel that the immediate issue is that without an agreement, should the ECB continue to allow Emergency Lending Credit to be extended to Cypriot banks. They write, “It had previously threatened to cut it off as of by tomorrow. This was the hard place on the other side of the rock of the conditionality which included a tax on all depositors that Cyprus found itself in over the past weekend.”