The chopper swooped down. Ropes were dropped to the ground. Two prisoners clambered up and got away. But within hours, Canadian authorities had tracked them down. Just like in the movies, the bad guys were brought to justice.
European markets are lower this morning on news out of Cyprus. In order to obtain an EU bailout, the country introduced a proposal over the weekend to tax its bank depositors up to 10 percent, though analysts expect the final levy to be closer to 3 percent.
Julia Coronado, chief economist with the investment bank BNP Paribas, joins Marketplace Morning Report host Jeremy Hobson to explain how the situation in Cyprus is rippling out to other economies around the world.
The $13 billion bailout by the eurozone and IMF would levy a one-time charge on deposits, including those of Russian oligarchs who have billions of euros in Cypriot banks.
Financial markets in Asia and Europe fell sharply today thanks to the unusual terms of the EU bailout of Cyprus. A tax of up to 10 percent on bank deposits in Cyprus was proposed to defray some of the cost of the bailout. The plan is likely to be softened before the Cypriot parliament votes on the package tomorrow. But, has damage already been done?
Though the levy on deposits is unusual method, there’s no mystery why it is being imposed on bank accounts in Cyprus. The Germans in particular insisted on it. They believe that large amounts of cash in the Cypriot banking system belong to Russian money launderers, and that it’s only right that they too should bear some of the cost of the bailout.
But the levy also hits ordinary law abiding depositors. And that’s dangerous says fund manager Henry Dixon, who believes it could undermine confidence in the banks in other troubled eurozone countries:
"I think this is a scary measure," says Dixon. "It would be absurd to think that people are not thinking about depositors in Ireland, Portugal, Italy, Spain and thinking maybe -- you know -- my money’s better out of the bank and under a mattress."
There are even doubts about the legality of the savings tax since most European bank accounts of $130,000 are insured.
And while much of the effort expended on the eurozone debt crisis has focused on re-building trust in the banks, there are some fears that this latest proposal could trigger a bank run.
Mark Sanford, the South Carolina governor whose infamous affair led to his political downfall, is among 16 Republicans in Tuesday's primary. But he is by far the best-known and the most controversial. The special election will fill the seat left open when Tim Scott was tapped to replace retiring Sen. Jim DeMint.