Posts From March, 2013

Cyprus defends bailout deal amid recession fears 

Sunday, March 24, 2013 4:00:00 PM Categories: Europe

The government of Cyprus has defended a 10bn-euro bailout deal to save its banks from collapse, amid warnings the island faces deep recession. Laiki (Popular) Bank, the country's second largest, will be wound up, but small savers will be protected. Depositors with more than 100,000 euros ($130,000; £85,000), many of whom are Russian, face big losses.

Cypriot finance minister Michael Sarris said his country had avoided a "disastrous exit from the eurozone". But correspondents say Cyprus' economy will shrink sharply as offshore banking - its main industry - is effectively shut down.

President Nicos Anastasiades - who negotiated the deal with the "troika" of the EU, the European Central Bank and the IMF in Brussels - is to address the nation in the coming hours.

It is not clear when Cypriot banks will reopen, or when temporary restrictions on the movement of capital will be lifted.

Cyprus puts levy on bank accounts 

Sunday, March 17, 2013 4:10:00 PM Categories: Europe

People in Cyprus have reacted with shock to news of a one-off levy of up to 10% on savings as part of a 10bn-euro (£8.7bn; $13bn) bailout agreed in Brussels.  The controversial plan, negotiated with the European Union and International Monetary Fund, marks a radical departure from previous eurozone bailouts.

People with under 100,000 euros in their accounts would face a one-off levy of 6.75%, while anything above would get a one-time tax of 9.9%. Depositors would be compensated with the equivalent amount in shares in their banks. If it goes ahead, the levy would affect many non-Cypriots with bank accounts, including UK expatriates. However, depositors in Cypriot banks' operations outside the country would not face a levy.

If you have any concerns about this or would like to discuss it further please get in touch.

UK housing market shows sales lift 

Monday, March 11, 2013 3:28:00 PM Categories: Mortgages

UK house sales hit their highest level in more than two-and-a-half years in February, but the figures do not signal a housing boom, surveyors say. The Royal Institution of Chartered Surveyors (Rics) said nearly 17 homes were sold per surveyor in the three months to February.

The rise in sales was set to continue, Rics said, even though inquiries from potential buyers had failed to pick up since January's cold snap. Prices were also relatively unchanged.

The number of homes being sold at present in the UK is about half the total seen in 2007 before the financial crisis hit, according to figures from HM Revenue and Customs. The housing market has had little momentum in recent years, although a number of government schemes have assisted the market for new homes.

However, many borrowers have found it tough to raise the deposit required by lenders to secure a home loan.

Banks reduce loans, in spite of Funding for Lending 

Sunday, March 03, 2013 11:14:00 AM Categories: Economy Mortgages

The number of loans being offered by banks has continued to fall in spite of the Funding for Lending Scheme (FLS). The scheme, which began in August last year, was designed to encourage banks to lend more money, both to individuals and businesses.

However, the Bank of England has announced that net lending fell by more than £2.4bn in the final quarter of last year. Lloyds was amongst the banks that lent less, while Barclays lent more.

In total, £80bn is being made available to banks at reduced interest rates, but only if they guarantee to lend that money on to Britain's small and medium-sized businesses, as well as individuals.