George Liu's  Instablog

Jeroen Dijsselbloem, the Dutch finance minister and the head of the Eurogroup just said exactly the worst thing he could have possibly said. Instead of reassuring markets that Cyprus was unique in dipping into "sacred" deposits because of its oversized banking sector and traditional role as an offshore tax-haven, Dijsselbloem says that the Cyprus bank restructuring plan should be seen as a template for the rest of the Eurozone. As noted by Pawel Morski, a pseudonymous hedge fund manager, "2 groups in markets right now: people waiting for Dijsselbloom to get adult supervision and people selling everything."

Thanks for promoting contagion and Eurozone bank runs, Mr. Dijsselbloem. Wonder what Tuesday will bring?

The Eurogroup (comprised of Eurozone finance ministers) have approved the plan drawn by the troika to bail out Cyprus. Also, since the deposit tax portion of the bailout was passed as a "bank resolution," it does not require approval of the Cyprus parliament. The deposit tax will hit only deposits above 100,000 euros in Laiki and the Bank of Cyprus.

...And its meeting with the troika has concluded. According to preliminary reports out of the meeting (aka the Twitter feeds of Peter Spiegel and Kathimerini English), the troika agree with Cyprus that Laiki is wound down and the Bank of Cyprus survives (so maybe the IMF and Germany caved in?). Either way, now the Eurogroup will have to approve the bailout outline. Also according to Peter Spiegel, deposits above 100,000 euros at BOTH Laiki and Bank of Cyprus will be hit with a significant levy.