7 November 2014
A glossary of terminology used on this website has been drafted to help readers follow developments in the FBME Bank case:
Resolution Decree: The Cyprus Resolution of Credit and Other Institutions Law of 2013. The purpose of this Decree is to restore the capital adequacy of insolvent banks.
Misuse of this Decree: When you invent a use for this Decree to commandeer some other bank’s branch and behave as if it now belongs to you.
Hostile takeover: When you try to sell a commercial undertaking, say the branch of a bank, without the owners’ consent.
Protection of depositors: When you make it very difficult for some depositors to have access to their own money, and impossible for thousands of others.
Strangle: To prevent a business having access to its own money without good reason, thereby preventing it from paying its associates, say ‘merchants’, and thus forcing it to suspend operations.
Monopoly and monopolistic pricing: When there is only one company in a market providing a service because you might have pushed its competitor into suspension; and then you, me, the Government and everyone else in Cyprus watch as prices go up.
Redundancies: When, because a company is in suspension due to actions you or I might have taken, people have to be laid off at cost to them, their families and the Republic of Cyprus.
Normal banking: Not happening at FBME’s Cyprus branch.
Conflict of Interest: An unknown condition in Cyprus
Stifado: A Cyprus rabbit stew – or a right mess in which a major regulatory authority may find itself
Buck shifting: Blaming someone else, say in Africa, for the consequences of your own actions.
Arbitration: Measures to get a reasonable solution through discussion and analysis of the arguments of both sides.
Fiat: What you manage by when you don’t think you are answerable to anyone else, or when your Resolution Authority is managed by, well, you and a couple of friends. It is the opposite of the true meaning of arbitration.
Closure of Branch: What happens when you go on holiday but leave no one to authorise transactions or make decisions in your absence.
Expropriation: When a public agency takes private property for its own use.
To be continued …