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tokyo financial reviews
LONDON
(MarketWatch) — European stock markets staged broad-based losses on Monday,
after a bailout proposal for Cyprus, including a controversial levy on bank
deposits, stoked fears that other struggling countries would follow the same
path.
The Stoxx Europe 600 index (XX:SXXP) lost
0.2% to close at 296.81.
The losses mirrored a weak trading day in Asia along with
softness for U.S. stocks, on the back of 10 billion euro ($12.9 billion) deal to bail out Cyprus announced
over the weekend.
The bailout agreement came with an unprecedented levy on bank
deposits, with depositors with more than €100,000 euros taxed at 9.9%, while
those with less at 6.75%, marking the first time in the euro-zone crisis that
depositors will lose money and raising fears such measures could spread to
other struggling euro-zone nations. Here’s why markets are in
an uproar over Cyprus deposit tax
A vote on the
bailout was reportedly pushed back a day, as
President Nicos Anastasiades, who has been in parliamentary meetings in
Nicosia, reportedly wants the terms of the deal amended.
“Should depositors
in Cyprus or other peripheral countries feel safe now? They may not. After all,
deposit-guarantee schemes do not guarantee against a levy. Depositors may also
have to factor in that the one-off levy could inspire national governments to
do the same thing. So the risk of bank runs has just gone up,” analysts at
Danske Bank said in a note.
ATMs in Cyprus were
reportedly already running out of cash over the weekend, as depositors tried to
avoid the tax.
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