Still, Cyprus is a known money-stashing haven for wealthy Russians. They put their rubles there to take advantage of low corporate taxes and light financial regulations. In 2011 alone, Russians “invested” $119.7 billion in Cyprus, nearly five times the island’s total economic output, according to a money laundering watchdog group called Global Financial Integrity. Now, Russians likely have between 20 billion to 25 billion euros ($25.9 billion to $32.4 billion) in Cypriot banks, nearly a third of all deposits.
Officials in Spain and Italy, two other financially unstable EU countries, quickly reassured their citizens this weekend that deposits there wouldn’t be hit too.
Still, I don’t understand how this affects America.
While you probably won’t see chaos at your Bank of America branch today, remember that big, international banks like Bank of American, as well as others like JPMorgan Chase and Morgan Stanley, conduct trades that tie them to more than the U.S. Moreover, if Cyprus triggers runs on banks in other European countries, crushing their financial systems, those larger nations are more likely to be connected to the U.S. in terms of trade or something else.
How are the markets holding up?
Glad you asked. European markets finished their second consecutive day in the red. The FTSE 100 lost 0.3% to 6,441.32, and the Euro Stoxx 50 retreated 1.2% to 2,671.96.
The euro declined by 0.5% against the dollar to $1.2875
U.S. stocks also fell. The S&P 500 went down 0.2% to 1,548.34, and the Nasdaq composite dropped 0.3% to 3,2229.10. The Dow Jones industrial average was unchanged.
Bank stocks led U.S. markets lower. JPMorgan was off 0.6% to $49.20. Bank of America fell 1.4% to $12.40. Goldman Sachs dropped 2.5% to $148.84. Citigroup fell 1% to $45.79. Morgan Stanley fell 2.6% to $22.39.
Did the president really get elected while supporting this tax?
Anastasiades rejected the idea during the campaign. Making his support for it doubly difficult.
Reach Abram Brown at firstname.lastname@example.org.