Reprinted from: The Montreal Gazette
By, Jay Bryan
A part from the titillating presence of Russians with possibly shady wealth, there’s not a lot of difference between today’s banking crisis in Cyprus and the crises that we saw a few years ago in places like Iceland and Ireland. As with the preceding events, the outcome seems certain to be painful, this time not only for Cypriots but also for the credibility of the eurozone’s political leaders. But disaster is unlikely…
As of Friday, it appeared likely that a new plan would impose heavier levies on big depositors and leave the smaller ones alone. That pretty much guarantees that the days of easy Russian money and a large financial industry are over. On the other hand, not all is lost for Cyprus.
Chief Strategist Peter Berezin at Montreal’s Bank Credit Analyst points out that since the easy money is gone anyway, it would be wise to impose a very big levy, maybe 50 per cent, on big bank accounts. At least this way, the country would raise enough funds to make its downsized banks financially solid.
And despite the recent nervousness about Europe, Berezin continues to rate its stocks as one of the best values around — if you’re willing to hang on through the turmoil that might last for a few more years. It’s hard to find another place where you can buy so many good companies so cheaply.