Why Spain’s Big Bank Bailout Is Really a Big Bust

NICOSIA — Cyprus was just hours away from a deal on Friday to raise billions of euros and unlock a bailout from the European Union that could avert financial meltdown and exit from the euro, its ruling party said. There is cautious optimism that in the next few hours we may be able to reach an agreed platform The remarks from the deputy leader came after Moscow had rebuffed requests from Nicosia for assistance to save Cypriot banks in which Russians have billions of euros at risk.

A few days ago Spain was purportedly going to need another €30 billion to €70 billion to recapitalize Spanish banks. I suggested the amount would be at least triple that and it did not take long to do so. Yahoo! Finance reports Spanish bailout could reach 100 billion euros A bailout for Spain's teetering banks, once requested by Madrid, could amount to as much as 100 billion euros, two senior EU sources told Reuters on Saturday.

NICOSIA, Cyprus — Cyprus will impose limits on money transfers and dispatch extra security guards to prepare for Thursday’s reopening of the banks, which have been shut for almost two weeks to avoid a run during the country’s financial drama. A banking official said Wednesday that new controls will include restrictions on large-scale transfers from the country’s two largest and most troubled lenders, Bank of Cyprus and Laiki. Both are being restructured and big depositors face losses of as much as 40%.

By Cullen Roche: Another Sunday bailout of Europe. What else did you expect? By this point we've all seen this movie 100 times so this should not come as a big surprise. European leaders have made it clear that they'll do anything to avoid a Lehman 2.0, but the problem is that they won't do enough to actually fix the euro.In case you haven't heard the news yet, here's Reuters:

(NICOSIA, Cyprus) — Large depositors at Cyprus’ largest bank may be forced to accept losses of up to 60 percent, far more than initially feared under the European rescue package to save the country from bankruptcy, officials said Saturday. Deposits of more than 100,000 euros ($128,000) at the Bank of Cyprus would lose 37.5 percent in money that would be converted into bank shares, according to a finance ministry decree obtained by The Associated Press.