It's surely looking bumpy across the pond and in Asian markets after bank deposits are raided in Cyprus for a bailout:
Risk assets fell across the board on Monday as Asian markets saw a massive sell-off after a weekend
decision by the euro zone to force depositors in Cyprus to contribute towards a bailout sparked concerns of contagion across other peripheral countries. The Hang Seng Index and Japan's Nikkei led losses by over 2 percent, Australia's benchmark declined to a two-week low and Seoul's Kospi hit a fresh one-month low. Meanwhile, Shanghai shares traded at their weakest levels in two months and the Hong Kong market erased all its gains for 2013.
The euro zone's decision to implement a levy on bank deposits of all sizes in return for financial aid marks a radical departure from previous euro zone aid packages. "It (the levy) could be seen as akin to the Fed deciding not to stand behind Lehman Brothers in 2008," said Jason Hughes of IG Markets in a note.
The unusual bailout proposal rattled currency and commodity markets with Brent crude dropping over $1 in Asian trade, the euro tumbling to an all-time low for 2013 and the yen briefly hitting a one-week high against the U.S dollar.
Meanwhile in Cypress:
The prospect of savings being so savagely docked sparked terror among the island's resident British community. At the Anglican church's weekly Saturday thrift shop gathering in Nicosia, Cyprus's capital, expats expressed alarm, with many saying that they had also rushed to ATMs to withdraw money from their accounts.
"There's a run on banks. A lot of us are really panicking. The big fear is that there soon won't be cash in ATMs," said Arlene Skillett, who lives in Nicosia. "People are worried that they're automatically going to lose 10% [of their savings] in deposit accounts. Anastasiades won elections saying he wouldn't allow this to happen."
She said a lot of elderly Britons had transferred savings to the island when they decided to retire there. "Nobody can understand how they can do this – isn't it illegal? How can they just dock money from your account?" she asked.
In the coastal town of Larnaca, Cypriots described how they had queued from the early hours in the hope of withdrawing deposits from banks.
"A lot of us just can't believe it," said Alexandra Christofi, a divorcee in her 40s who said she had rushed to her bank before doors opened at 6am.
"I had put my money there for a rainy day. It's absolutely all I have and I cannot understand how Cyprus is being singled out. Other EU countries got bailouts and we're only in this position because we supported Greece," she said, referring to the massive losses the Cypriot banking system suffered as a result of Greece's restructuring its debt last year. "Where is the fairness in that? Where is the solidarity and support that is meant to be the reason why we are all unified in this common currency in the first place?"
Couldn't happen here... right?