Cyprus bailout: Your questions to Robert Peston
- 18 March 2013
- From the section Business
BBC Business Editor Robert Peston answered your questions on the Cyprus bailout plan in a live Twitter Q&A on Monday 18 March 2013.
This is an edited version of the session.
Question from@GregRowell: Do you think the Cyprus 'bailout' will have the effect of bank runs regardless of the outcome of tomorrow's vote?
Robert answers: Precedent of imposing a levy on deposits in weak banks creates risk in eurozone of run on banks perceived to need bailout
Question from@TheCMtyre: Surely Cyprus gov can't just 'take' 10% of people's savings as easy as that? Is that ethical?
Robert answers: In most parliamentary democracies, MPs can impose any non discriminatory tax. Cyprus bank tax applies to all depositors
Robert continues: But am not sure on the ethics of this particular tax
Question from Kirk who emails:Does the tax apply to corporations that have account holdings in cash?
Robert answers: On details we have, the levy applies to all deposits in Cypriot banks. But holders of bonds in Cypriot banks not punished
Question from@MShepheard: Do you think that the Cypriot levy creates a precedent other countries might follow?
Robert answers: Eurozone leaders say Cyprus a special case and deposit levy will not be imposed elsewhere. But we can't be certain
Question from@si_smith: In light of the Cyprus precedent does it make sense to move savings to non EZ/EU bank ie Swiss ie Zürcher Kantonalbank?
Robertanswers: I can't give advice, but risk for eurozone is that many do move their money out of weak eurozone banks
Question from Terry who emails: If Cyprus has such a small economy in global terms, why is this crisis having such a big impact world wide?
Robertanswers: Because it creates the risk of money being moved out of other weak eurozone banks, thus setting back recovery of eurozone
Question from @bestdogadvice: Will the Cyprus bailout effect us in Britain? If so how bad? Is this another reason why we should leave EU?
Robert answers: If Cyprus bailout debacle undermines eurozone's economy & financial recovery, that bad for UK - because of trade and financial links of UK to eurozone
Question from@Israel_VS_Mob: Robert, can this ever happen to the UK banks if we ever get into as much trouble as Cyprus?
Robert answers: Well British government has been clear that our bank deposits up to £85,000 will be 100% protected as & when bank fails
Question from@top1percentile: Why did Germany insist on a bank tax on individuals in Cyprus but not in Greece, Spain, et al?
Robert answers: German politicians believe much cash in Cyprus banks belongs to non EU folk, including Russian tax avoiders & launderers, didn't want to rescue them
Question from Phil who emails: Won't this action promote distrust in banks particularly those in crisis hit countries like Spain and Italy?
Robert answers: Err yes
Question from@Jedi4Now: Brits buying villas there may have deposited large sums in Cypriot banks ahead of the purchase, will they loose 10%?
Robert answers: That's what it looks like
Question from@devonseaglass: What will the Cypriot government do with the money? Will it solve their banking crisis?
Robert answers: The levied money will be used to strengthen the Cypriot banks whose deposits are incurring the levy
Question from@sequentialogic: Has the inability for Cypriots to set interest rates contributed to the current problems?
Robert answers: One of the reasons Cypriot banks became over-extended is they were able to borrow to much too cheaply for many years
Question from@plotholder22: I am going to Cyprus in 2 months time on holiday. How will I be affected?
Robert answers: Depends on what happens in next few days, especially whether bailout actually happens. But am jealous you are having holiday in sun
Well that's it for #askbbcpeston. I'm not sure what I thought of it - other than it's quite tiring. What do you think? R
For more tweets from Robert Peston you can follow his Twitter account @Peston
Twitter Q&A produced by Sarah Fowler