We don’t know the individual profile of every depositor in Cyprus but we do have some gross numbers, there are about 19,000 depositors at Bank of Cyprus with with uninsured deposits of €8bn, they will face a 40% haircut, at Laiki there are uninsured deposits of c. €3.2bn and they’ll get about an 80% haircut, some are saying that virtually all of that may be lost in the end workings.
Depositors getting creased was one of the things that justified central banks creation, which makes this ongoing story unusual in its own right.
As for the haircuts in BoC, 19,000 accounts and €8bn equate to about €421,000 per uninsured account – not precise because obviously they don’t all have the same balances, but to average that out with a 40% reduction comes to a haircut of approximately €168,400 that’s quite a haircut!
To put it in actual ‘haircut’ terms, it’s like this, I get a haircut about once every 5 weeks, which give or take turns into about 11 a year, they cost €13 every time, round it to €15 with a small tip. At an annual cost of €165 it would take me 1,020 years to use their haircuts to pay for my haircuts which is about 970 years longer than my current life expectancy.
Think I’m happy with my haircuts for now, would hate to get the Cypriot version.