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 …