Here are some quick points on the Cyprus deal which the Eurogroup agreed to last night. The agreement outline is very much along the lines of what I have been recommending regarding bail-in guidelines (extended version here for subscribers) and is therefore a much fairer deal than the deal presented to Parliament last week. But the debt sustainability of the sovereign remains a question, as do the capital controls and potential for deposit flight. The Cypriot economy will not do well in the coming years.
The full note for Credit Writedowns Pro subscribers is after the jump. Also note that I am visiting relatives in Germany during the next two weeks and will not post regularly during that time.
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