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ECB: Greek Greek Cyprus plan to tax insured depositors ‘not smart'

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(GlobalPost/GlobalPost)

European central Bank President Mario Dragi said on Thursday that Greek Cyprus's initial decision to charge a levy on insured as well as uninsured banks depositors was a mistake.

"That was not smart, to say the least, and was quickly corrected," he said. Draghi also told a news conference that Greek Cyprus's bailout, including hitting wealthy depositors with losses, was not what would happen in further bailouts.

Draghi stressed that the Greek Cyprus bailout -- involving losses imposed on richer bank depositors -- was not a template for future rescues as others have suggested. The euro zone struck a deal last month to hand Greek Cyprus a bailout worth 10 billion euros ($12.84 billion) but demanded rich depositors in its banks forfeit some money despite the risk of a wider bank run. Initially, Greek Cyprus also sought to charge those with 100,000 euros or less even though they had a bank deposit guarantee.

http://www.globalpost.com/dispatch/news/asianet/130406/ecb-greek-greek-cyprus-plan-tax-insured-depositors-not-smart