Sector Snap: some banks falls on Cyprus concerns
Shares of some banks drop as Cyprus lawmakers try to amend measure to tax bank accounts
NEW YORK (AP) -- Shares of European banks and others with global reach traded lower on Monday as lawmakers in Cyprus tried to amend a measure to tax bank accounts in the country as part of a debt bailout.
A bank holiday was extended by two days, meaning Cyprus banks will remain closed until Thursday. The extension comes after a proposal to seize a percentage of all bank deposits in Cyprus, a move that was demanded as a condition for a €10 billion ($13.09 billion) international rescue package.
The plans to tax depositors in Cypriot banks as a way to partly fund a bailout of the country sent stocks markets down around the world and battered the euro.
Although Cyprus accounts for only around 0.2 percent of the economic output of the 17 European Union countries that use the common euro currency, the tax on depositors was a significant policy shift that stoked fears of bank runs in other troubled European economies. Cyprus residents already emptied virtually all ATMs on the island in a weekend run.
The Cypriot Parliament has to back the bailout plan for it to be implemented, and lawmakers have called it an unfair blow to small savers, since deposits across the eurozone have been guaranteed up to €100,000. The Parliament speaker says a vote it will come Tuesday.
Julian Jessop of Capital Economics said in a client note that the problems in Cyprus could have global implications. He said it could influence the course of fiscal policy in the U.K. and monetary policy in the U.S., sap investor appetite in Japan and revive safe-haven demand for gold.
Here's how some banks are faring in afternoon trading:
HSBC Holdings PLC up 3 cents to $54.57.
U.S.-listed shares of Lloyds Banking Group PLC fell 2 cents to $3.01.
Barclays PLC lost 69 cents, or 3.6 percent, to $18.54.
U.S.-listed shares of Royal Bank of Scotland Group PLC dropped 30 cents, or 3.2 percent, to $8.98.
Deutsche Bank AG fell $1.24, or 2.8 percent, to $43.39.
UBS AG shed 28 cents to $16.10.
U.S.-listed shares of Credit Suisse Group AG dropped 58 cents, or 2 percent, to $27.82.
JPMorgan Chase & Co. declined 52 cents to $49.50.
Citigroup Inc. fell 89 cents to $46.37.
Morgan Stanley shed 68 cents, or 2.9 percent, to $22.91.
Goldman Sachs Group Inc. fell $2.54 to $152.30.
