Forex Flash: Can initial damage to Cypriot investors be salvaged? – UBS

FXstreet.com (Barcelona) - Investors in Cyprus are calling the rapidly deteriorating situation as a "rank violation of the spirit of deposit insurance". The agreement is not yet set in stone and there is still time to re-design the plan so that small depositors are spared. However, “it seems faith in the protection offered by deposit protection schemes has already been shaken by weekend events, and it is unclear if pulling back from the brink now would be enough to undo the damage.” writes Research Analyst Gareth Berry at UBS.

Much will now depend on how retail depositors react over the coming days. Banks in Cyprus and Greece are closed today for an annual scheduled public holiday, although banks in Spain and Italy are expected to open.