How to switch off the cypriot financial crisis without weakening durably Europe ?
The two major banks in Cyprus - Bank of Cyprus and Laiki Popular Bank - have lost more than 4 billion EUR because of their exposure to the Greek bond market. In this paper, we look at how the European Union has responded to banking and financial problems that have affected Cyprus since the end of 2011. Although the financial crisis is minor in absolute terms, it showed that even the failure of a small country can generate systemic risk throughout the euro area. The rescue plan drawn up by the European Commission, the European Central Bank and the IMF (Troika) was adopted later. Taxation of deposits and the establishment of exchange controls is an unprecedented situation that could affect investor confidence in the euro area. Furthermore the tutelage of Cyprus gives authorities very small margins of action and may jeopardize the future of this country.
|Date of creation:||25 Feb 2014|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 33 1 53 63 36 00
Web page: http://www.ipag.fr
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Philip R. Lane, 2012. "The European Sovereign Debt Crisis," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 49-68, Summer.
- Alexander Michaelides, 2012. "Banking Crisis in Cyprus and in the Eurozone," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 6(2), pages 41-47, December.
- De Grauwe, Paul, 2012. "The Governance of a Fragile Eurozone," Walter Adolf Jöhr Lecture 2012, University of St. Gallen, School of Economics and Political Science, Institute of Economics (FGN-HSG).
- Guesmi, Khaled & Ftiti, Zied & Abid, Ilyes, 2013.
"Greece’s Stock Market Integration with Southeast Europe,"
Journal of Economic Integration,
Center for Economic Integration, Sejong University, vol. 28, pages 668-682.
- Khaled Guesmi & Zied Ftiti & Ilyes Abid, 2014. "Greece’s Stock Market Integration with Southeast Europe," Working Papers 2014-440, Department of Research, Ipag Business School.
- Tobias Adrian & Hyun Song Shin, 2008.
"Liquidity and leverage,"
328, Federal Reserve Bank of New York.
- Thomas J. Sargent & Neil Wallace, 1981. "Some unpleasant monetarist arithmetic," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall.
- Reinhart, Carmen M. & Rogoff, Kenneth, 2010.
"Growth in a Time of Debt,"
CEPR Discussion Papers
7661, C.E.P.R. Discussion Papers.
- Rogoff, Kenneth, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, MIT Press, vol. 100(4), pages 1169-89, November.
- Paul De Grauwe, 2012. "The Governance of a Fragile Eurozone," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 45(3), pages 255-268, 09.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2011.
"From Financial Crash to Debt Crisis,"
American Economic Review,
American Economic Association, vol. 101(5), pages 1676-1706, August.
- Christopher A. Pissarides, 2008. "The Labour Market and the Euro," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 2(1), pages 3-9, June.
- Salvador Barrios & Per Iversen & Magdalena Lewandowska & Ralph Setzer, 2009. "Determinants of intra-euro area government bond spreads during the financial crisis," European Economy - Economic Papers 388, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
When requesting a correction, please mention this item's handle: RePEc:ipg:wpaper:2014-169. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ingmar Schumacher)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.