John’s already written about the Cypriot bank bailout / bank customer hostage crisis, but check this out, from an interview with a economist Chris Pissarides, a Nobel Prize winner born and raised in Cyprus (via Atrios):
Do you favor or oppose taxes on bank depositors?
I am totally against it. First, deposits under 100,000 are insured. What happened to that insurance? How could the euro group agree to taxing deposits as small as one euro? What is the meaning of deposit insurance in the euro zone? Second, deposits include the savings of honest people who have paid their taxes and saved for retirement, to buy a home, educate their children or whatever. Why pay a hefty additional tax? And how would these people feel when they woke up on Saturday morning to be told, “Sorry guys, we are not letting you withdraw your money anymore, until we sort out how to take a big chunk away from you.” And why? Because two banks out of the tens operating in Cyprus made bad investment decisions three years ago to help Greece out of its crisis, and got hit by the troika. What’s the incentive that banks now have in the European Union to treat risky investments with caution? If one of them takes bad risks the others will pay for it; if it works well for it, it will keep the profits. A classic scenario for market breakdown.
Setting aside the overall stupidity of this move, it’s delusional psychosis to propose that depositors should lose €6,750 of the first €100,000 on deposit (which is what the EU proposed and the Cypriots will hopefully reject). I can’t imagine a more destabilizing move than voiding deposit insurance the moment that a bank “needs” a bailout. Deposit insurance was designed for precisely this type of circumstance. If this happened here, there wouldn’t be enough paper currency to handle the run that would ensue as everyone chose to move their money into a fucking shoebox. Especially when interest rates for all deposits are in the 1-2% range, the reason people tolerate those rates on savings or CDs is because their principal is safe. How can anyone running a banking system be so goddam obtuse?
Update: The Cyprus parliament rejected this plan unanimously a few minutes ago, presumably because they didn’t want to be hacked to death in the streets. Thanks to Comrade Scott for pointing that out.
comrade scott's agenda of rage
Modern banksters live in a bubble not unlike the GOP bubble, that’s how.
The WaPo is reporting that the Cyprus Parliament is ready to unanimously reject this.
Villago Delenda Est
This is so incredibly stupid. It’s the EU finance ministers and the banksters putting a big “Kick me and then lob off my head” sign on their backs.
The Europeans are not as sheeplike as Americans. There will be blood for this.
Eric U.
@comrade scott’s agenda of rage: if the Parliament rejects it, they will be doing everyone, including us, a favor. This could actually take down all the idiot bankers, and by extension, the world economy.
In fact, I keep hoping that the offer will be withdrawn and re-done.
Prefect of the Congregation for Divine Worship and the Discipline of the Sacraments, Cardinal mistermix
@Villago Delenda Est: Repeal deposit insurance overnight, take 7% out of everyone’s account, and you’ll find out how “sheeplike” Americans are. Not very, would be my guess, and we have more guns.
DonT
what’s with the Europeans. they’re piling worse economic theory on top of bad economics. It isn’t the big guys that are going to get hurt here – why should we be surprised?
Alex in NYC
Tell me where you’re getting 1% or more these days, without a CD/long term commitment!
The Other Bob
If they pulled this in the U.S., the Tea Party and the Occupy Wall Street folks would be side-by-side at the foot of the NYSE.
Baud
After even the banks supporting this? I agree it appears very destabilizing.
Eric U.
Parliament rejected the deal
dr. bloor
It pays really, really well.
Xenos
The EU does not run the Cypriot banking system – the Cypriot government does. Now the EU is bailing out a system that never paid enough to fund its own depositors insurance fund in spite of treaty obligations to do so.
Indeed, the EU is in the process of rolling out an EU-wide insurance system. But they are not about to bankrupt that whole system still a-borning for the Cypriots, when they could not bother taking enough insurance from their ‘paradis fiscal’ clients to insure it.
IT is not a well thought-out program, but the Germans have a point here.
ranchandsyrup
The bailout is making Russia mad (they hold a $3B loan). You don’t want Putin rearing his head over Cyprus, do ya?
Jon
Seems like the EU exists to put austerity straightjackets it southern members at the behest of its northern ones, yet refuses to use such authority to, I dunno, stop a quasi-dictator in Hungary from amending its Constitution to ban gay families and fine homeless people?
EU Bancorum, Bancos, Bancosque (Germani)
Prefect of the Congregation for Divine Worship and the Discipline of the Sacraments, Cardinal mistermix
@Alex in NYC: You can get almost 2% on a 5 year jumbo CD, which is an FDIC insured deposit, but you’re right, regular deposit rates are much lower.
Jon
@Xenos: No, the Germans don’t have a point. Their point is internally politically relevant only. Whether or not they have a point of any kind, this is a destabilizing move and they own the consequences.
They could have asked for, I dunno, some kind of banking reform and given the bailout without this nonsense.
BREAKING: There is funny money in banks sometimes.
Prefect of the Congregation for Divine Worship and the Discipline of the Sacraments, Cardinal mistermix
@Xenos: So you’re saying the banking system in Cyprus must be destroyed to be saved? Because voiding deposit insurance destroys the banking system, no matter whether the Germans have a point or not.
Hungry Joe
“Insurance”? Right. As Inigo Montoya said, “You keep using that word. I do not think it means what you think it means.”
Cargo
I bought some bitcoins last summer at under $10 apiece. They have spiked up to over $50 recently. I sold some off in the 30s, but thank the stars I kept some. I was originally getting into bitcoins to make money off Paultards, and mission accomplished, but now I see they kind of had a point. I plan to buy more as soon as I can.
If they do this in Cyprus now they’ll be doing it in Germany in six months and they’ll be doing it here in a year. Bitcoins are the only currency that is safe.
Montysano
@Prefect of the Congregation for Divine Worship and the Discipline of the Sacraments, Cardinal mistermix:
Hmmm…. and at whom should we aim our guns? Unless your money is buried in mason jars in the back yard, there is no defense (in the classic sense of the word).
That said, is there a better recipe for a global bank run than to start hinting at asset confiscation?
Ash Can
OT, but I have to share: Our local NPR affiliate is running the stupidest fucking membership ad campaign ever.
Jon
@Cargo:
Dude, you’re a sucker. That “currency” could so easily be manipulated by a few whales getting into it and playing around with the trades. Have fun with that.
jl
@The Other Bob:
” the Tea Party and the Occupy Wall Street folks would be side-by-side at the foot of the NYSE.”
Well, the seriously grass roots part of the Tea Party that would turn out without corporate astroturf bus transportation and refreshments, and manufactured protest signs will turn out. Not sure how much of the teabaggers that would be.
Re the interview: Pissarides is a Nobel econ dude who won prize for understanding how job search and decisions about proper matching between workers and job openings effects the labor market.
He’s done work on how wage stickiness and fixed costs on employers and job seekers for hew hires produce frictions that, IMHO, provide good evidence for the Krugman/Stiglitz/DeLong and other Keynesian stories about how the macro economy works.
My main quibble with his comments is that I think he is overly friendly to large financial sectors, especially in small countries. I guess, if you have a bad under regulated financial system worldwide, why discriminate against small counttries who find that sector advantages for them? But I think that is a very poor second or third best policy.
On other hand, he is strongly for more financial sector regulation, which is good.
comrade scott's agenda of rage
@Jon:
http://www.businessinsider.com/crash-belies-confidence-in-bitcoin-2013-3
I suppose if somebody wants to play with something that can fluctuate from $27 down to $2 in a few months in the hopes it’ll skyrocket again, well, it’s Galt’s World, we just live in it.
jl
@Jon: I think the Germans do have a very narrow point re the financial system. But the Germans do not have any points at all in the larger economic context: they heavily influence policies that aggravate existing financial problems in the periphery countries.
burnspbesq
If somebody has to take it in the shorts as a result of management foolishness, shouldn’t it be the shareholders?
phil
In a few years, when Cyprus will be an energy rich country (huge gas reserves, sun, and wind), I hope they remember who wouldn’t help them (Germany).
Roger Moore
@Cargo:
Bitcoins are ridiculous. There have already been successful Bitcoin thefts, and the ostensible value is nonsense. If you want to put your money in something safe, you’d be much better off buying tangible assets, like gold coins or 9mm Parabellum rounds, or cowrie shells.
Kyle
Note to self: Buy stock in makers of home safes, because a lot of people will be looking to buy one soon. A precedent has been set.
patroclus
Deposit “insurance” in this case is already non-existent because there is no money in the deposit insurance fund to tap if and when the banking system collapses – just because there is a deposit insurance “law” doesn’t mean that there is actual deposit insurance. Apparently, the EU believes that the Cypriot banking system is a subterfuge for Russian mobsters and neither the ECB, the EU or the IMF want to shove money down a sinkhole to fund alleged nefarious actors. If the Cypriots don’t like the one-time tax thang, they’ll have to come up with something else, probably at least equally painful (or perhaps more).
The same did happen in the U.S. in the 1980’s and in 2008 and we had successive bailout bills (CEBA, FIRREA, FDICIA) and huge increases in assessment fees – which funded the planned increase of the new DIF to 1.5% of all deposits by 2020 (Dodd-Frank). And the SAIF did indeed collapse and was absorbed into the DIF in the FDIRA act of 2006.
jl
@jl: To amplify. what deposit insurance is adequate depends upon the probability of bank insolvency. That probability in European periphery is not independent of German, (Germany influenced) ECB, and (Germany influenced) Eurozone policies.
comrade scott's agenda of rage
@burnspbesq:
Clearly they’ve learned from us: privatize the profits, socialize the risk and if things get too risky, screw the 99%.
MikeJ
@phil: Sun and wind are incredibly difficult to export, and if anybody gets the natural gas they’ll treat the locals in the enlightened manner they treat the locals where ever they go.
jl
@patroclus: I read that the bank bondholders were protected (though that was in a comment here, so not sure whether that is true). And even small deposits had to pay a pretty stiff tax.
So, even if a lot of money in Cyprus financial system is dodgy foreign money (which seems to be in dispute), I don’t understand why small depositors have to make such a sacrifice.
Hoodie
One possibility is that greed makes people stupid. They might get away with the tax if they exempted holders up to the 100k deposit guarantee limit. One account I read is that this idea was spawned by rich Cypriots who were trying to reduce the money they were going to lose, and they didn’t want to kill of the offshore banking business that allowed them to get rich by having a huge haircut for larger depositors.
However, maybe this deal is clever stupid. I understand that the plan included a trade of the payment of this “tax” for equity in commercial banks with returns guaranteed by revenues from gas leases off the coast, which is about the only asset Cyprus has. Is it possible that this whole thing is a ruse to gin up outrage and then relent and limit the tax to deposits over 100k while slyly keeping the part that lets the large holders get sweetheart deals on the bank equity/gas income? Looked at that way, the proposed deal is a no-lose proposition. If the public doesn’t balk, they get a lower payout on their deposits and still get a cut of the gas revenue and/or equity of Cyprus banks that happily go back to money laundering. If the public does balk, they pay more up front but get potentially get more from the gas deal. A clever way to backdoor bailout the big money folks by selling off Cyprus’ natural resources at a discount. As a bonus, they get to keep the foreign depositors happy, making the bankers happy.
Violet
The banksters tried and failed with Cyprus. They will try again in some other country and with some other method.
Eric U.
I knew someone who buried money ($30k IIRC) in his back yard. His wife locked him out, so he went to dig it up and couldn’t find it.
Comrade Dread
Good for Cyprus for rejecting this.
A small part of me is hoping that somewhere in Greece, Italy, Spain, Ireland, and Portugal, the governments are printing up local currency again in anticipation of bailing on the Euro.
? Martin
@Cargo: Bitcoin bubbles are like any other bubble. Half of the investors will take a bath on them, and 100% of them are convinced it’ll be the other half.
Another Halocene Human
Here’s the thing: you can fuck the poor all day long. They’re used to it by now. As long as they have food and a job, even with negative pay, they will be engaged in their daily struggle and won’t hit the streets.
But if you fuck the middle class you get Nazis. Cf: Germany, Weimar Republic (thanks to greedy French), Greece, last year (thanks to greedy Germans)
Zifnab
@Jon: “BitCoin” is the new “Pogs”.
Maude
@Prefect of the Congregation for Divine Worship and the Discipline of the Sacraments, Cardinal mistermix:
In 2008, people were panicked about their bank accounts. I heard them on talk shows wanting to take their money out of banks.
I don’t want violence in the streets.
patroclus
@jl: That’s a different issue. If and when the collapse occurs, the bondholders (and the bank holding company shareholders) will likely not be protected at all. But this issue – the replenishment of the deposit insurance fund – has to be done some way, and if the Cypriots don’t like Angela Merkel’s suggestion, they’ll have to come up with it some other way. It’s fine to criticize this method – I don’t care one way or the other – but another solution will almost certainly be just as painful (or perhaps more). There are no simple answers to a problem like this, and unless the EU, ECB or the IMF change their minds, the Cypriots will bear the brunt. The alternative – a complete collapse of their money system – would be much worse.
glocksman
I’ve read elsewhere that the original EU plan was only for depositors who had over 100,000 euros and/or foreign depositors to pay the levy.
It was the new conservative Cypriot PM who insisted that the levy on large depositors be lowered, thus forcing a levy against small depositors to make up the difference.
It takes big brass ones to propose haircutting your own citizens in order to help Russian oligarchs, eh?
Petorado
If the Cypriot people were treated as investors rather than robbery victims, they may have received the concept better. If repayments were promised, interest accrued, and a stake in ownership the bank attached to these “deposit taxes”, there might be an inkling of fairness. But once again, the folks who effed things up remain in their positions, are not financially penalized for their poor judgment/ criminal behavior, and will still cash the bonus checks they were promised, because after all — business is business.
Keith G
Senator Paul continues to lay a foundation for his presidential candidacy
mdblanche
@Xenos: Do you know who else in Germany had a not well thought-out program, but did have a point?
Michael Finn
WTF is wrong with the Euorpeans? I’m sorry but they have had a currency crisis for what, four years? Now they want to extend it for another couple of years?
Fred Fnord
The funny thing is, of course, that if they did exempt the first (say) 100k euros (or even 20k!), then this would be a hugely progressive tax, of the kind that liberals should be applauding.
Because let’s face it, only the people who have giant piles of money have enough that they’re keeping it in Cyprus bank accounts.
Instead, the EU taxes everyone’s income (in some places progressively, in some cases less so), AND taxes everyone’s spending (VAT, which is hugely regressive). And nobody gets mad about that. They only get mad when the vast stores of wealth held by the wealthy get threatened.
Roger Moore
@glocksman:
Maybe it takes bigger ones to tell a bunch of Russian gangsters that they’re taking a haircut so your citizens don’t have to.
Baud
@Michael Finn:
No kidding. They don’t even have to deal with Republicans and they’re making us look competent.
Trollhattan
O/T but holy crap is this funny. Gayer than gay, gay group buys house across the street from Westborough Baptist Church, paints it rainbow-stripy and opens a gay pride center.
http://nymag.com/daily/intelligencer/2013/03/westboro-church-rainbow-gay-equality-house.html
Michael Finn
@Fred Fnord:
No, people are mad that their banks can no longer be trusted to hold their money. This isn’t something that should ever be even thought of. Once a society loses trust in it’s banks ability to hold onto their money then they collapse along with all their potential investments in society like loans to small and big businesses, families for homes, creating manufacturing plants.
Politics should never mingle with the basic social tenets society is based on.
jl
@patroclus:
I don’t see how voiding deposit insurance for small depositors to avoid insolvency, and share and bondholder risk in case of insolvency are separate issues. Could you explain?
Jay in Oregon
@Jon:
IIRC, the value of Bitcoin has crashed a couple of times.
What did the major Bitcoin exchanges do when a compromised account led to the value went from around $17.50 per Bitcoin to crash to just under a penny per coin?
They “rolled back” all the exchanges to reset the value.
http://nakedsecurity.sophos.com/2011/06/21/bitcoin-currency-collapse-where-next-for-digital-cash/
What were the libertarian whackadoodles saying about “fiat currency” again?
patroclus
@Roger Moore: That’s a good idea, but if they just target the deposits placed by non-Cypriots, then that will eliminate Cyprus as an offshore bank haven and they will lose all the revenue, seignorage, assessment fees and fees associated with that status for a long time to come. Presumably, they don’t want to do that either. There really are no easy answers here; particularly if the ECB and EU (and the IMF) continue to play hardball.
I assume that no one here would support a U.S. taxpayer bailout of Cyprus either.
mdblanche
@patroclus: The sum that needs to be raised is a measly 5.8 billion euros. But Angie would rather crash the European banking system than risk losing a few votes over it. What a profile in cravenness.
@Petorado: A stake in ownership of the bank is attached. Would you rather have stock in a failing bank or magic beans? You can at least eat the beans.
Comrade Mary
ING Direct in Canada is offering 1.35-1.4% on savings accounts, and you can get a 90 day GIC right now at 2.5%.
I thought ING in the States would at least be in that range, but it’s now Capitol One 360 and the standard interest on a savings account is .75%. Whoa. And I thought we have it bad when our interests rates dipped to 1.2% a while back. (It was around 3.5% when I first signed up in 2008.)
Violet
@MikeJ:
Have you seen the reports about the breakthrough with high voltage DC lines that may make exporting solar and wind much easier to do?
Maude
@Baud:
It’s a lesson in understanding how all those European wars happened and why our Founding Fathers made sure there was a unifying federal government. Look at some of the Repub states now.
The Euro doesn’t work.
I know this is a serious comment, don’t know what’s wrong with me.
maya
They’ll have to take my genuine, Glen Beck endorsed, Goldline International Kruggerrands from my cold green hands.
? Martin
@Trollhattan: They did a nice job on the paint. I trust the gayer than gay pride house will do something with the landscaping once things warm up – they have standards to live up to.
But that is among the best things I’ve seen this week.
Roger Moore
@Trollhattan:
So they’re counter-trolling WBC? Win!
mdblanche
@Keith G: What party will he be running as? Not a Republican, obviously.
@Baud: I’m beginning to think the European leadership are Republicans who know better than to talk about rape but are otherwise just as competent and reality-based. That makes them suaver and a lot more dangerous.
LGRooney
You’re kidding, right? The American people are such sheep they couldn’t be roused away from their Big Gulps except to get their war on.
Trollhattan
@? Martin:
Yes, they do need to add some landscape fabulosity once things thaw. Here’s hoping the local chapter of whatever the Hells Angels equivalent in Westborough is, helps keep the WBC rabble away.
Of course, they always seem to be traveling.
patroclus
@jl: Well, these are separate issues because of the way Merkel, the ECB, the EU and IMF have constructed the multi-stage process of organizing an ultimate bailout. What is deperately needed is a SDRM – a multilateral sovereign debt restructuring mechanism – that sort of acts like an international bankruptcy system for situations like this, that would be subscribed to by all the major financial powers (like the IMF/IBRD) which would set forth orderly procedures for the resolution and disposition of all claims. In the continued absence of that, legally, one has to look at each issue separately.
Deposit insurance is an internal Cypriot law that requires deposit insurance up to a certain level – it has to be coupled with an adequate locally funded deposit insurance fund or it is plainly ineffective. As I understand it, the law exists but the fund is depleted. Hence, this proposal. Holders of Cypriot bank bonds have separate legal rights to a stream of income that is backed by Cypriot bank system profitability – that doesn’t exist either because the system is essentially insolvent, so those holders are already facing the prospect that the income that they expected will never be paid. Only a bailout will allow those to be repaid, almost certainly with a steep haircut. Shareholders have contractual rights to receive dividends and/or sell those shares in the equity markets; which, as I understand it, are now illiquid in the sense that no one will buy them now, except at very steep discounts, so they are already essentially valueless. The only way to liquify those shares is with a bailout, which would almost certainly require a steep haircut from what was originally expected.
In order for a bailout to occur, the EU and ECB and IMF (in the Greek and Portugal and Ireland examples) have required “skin in the game” from all bailout participants, meaning austerity locally, steep haircuts from bondholders and bank shareholders in a step-by-step process. Cyprus is at step 1 now.
scav
as I understand it. the Germans / EU were insisting that the Cyprus put up a certain amount. of money on their own and came up with the basic idea (originaly closer to the amended one that failed. Heavens, they had an election and Cyprus was such a little place, good test site.). Cypriot president faced with the basic plan / ulimatum refused to let the top rate go over 10% for large accounts.). Nobody seemed seriously to consider context or spillover into bank runs in Italy or Spain or other weak EU countries (let’s watch banks tumble all over! the Spanish ones have lots of exterior connections to spread the problem financially.). And it’s not as though the Spanish aren’t already in the street. The perception that this German policy didn’t help. Not one of their finer moments in logical thought on many fronts.
@patroclus: I think there was a lot more freedom in the earlier cases as to how they came up with the skin — there wasn’t this raid on savings. This one is a bit different.
Yutsano
@maya: It’s quatloos or nothing pal!
Todd
@jl:
Is it time to start seriously shorting Euro denominated banks? The thing was supposed to be a cooperative, smoothly run effort. Instead, it has been a playground for the sort of Deutsche money managers who didn’t get the lesson they needed due to the failure of the tribunal at Nuremburg to hang Schacht, Funk or Krupps…
patroclus
@scav: Understood. This “skin in the game” proposal is different than the others and has been rejected because of the reaction of ordinary depositors. But, as I understand it, the non-existent Cypriot deposit insurance fund is also WAY more depleted than in the earlier examples in the sense that the other countries at least had some money in there whereas Cyprus has none. And, here, there is at least the suspicion that many of the depositors are Russian mobsters who are less meritorious than the usual mom and pop depositors with which we are more familiar.
This proposal failed – for reasons many have explained. But they’ll have to come up with another one if they want Merkel’s money.
I am not a kook
@Cargo: Is your last name “Cult” by any chance?
high-pH Chemist
@Zifnab:
Do they make Alf bitcoins?!?
scav
@patroclus: Very likely. I’ve been paying more attention to the contagion end of thing than details of internal Cypriot options. Sorry, Geographer, we like like diffusion and contagion effects.
The Moar You Know
Seems this was another one of the IMFs brilliant ideas.
They wanted a 40% tax.
If this had passed, it would have instantly destroyed the Eurozone banking system, and possibly everyone else’s too.
The next step is going to involve soldiers, a large moving truck, and people taking some or all of your stuff. The bankers will be made whole, even if every last one of us has to be bled to death to do it.
El Cid
Many reviews (including the UN’s own money laundering investigations) held that it was only the money from organized crime, in particular the massive drug money profits, kept in the world’s largest banks which kept the world’s largest banks from collapse.
Some thanks this is.
patroclus
@The Moar You Know: No, this was the Cypriot government’s idea. Granted, they are being pressured by the bailouters (the EU, ECB, and IMF) to come up with something to justify their participation in the forthcoming bailout, but this bright idea was there’s and there’s alone. Step 1 of the bailout process in the EU usually involves the local government, in response to pressure, coming up with something unpopular, which gets rejected and then they come up with something less popular, which is eventually swallowed.
The banks and their stakeholders – as previously known – are already essentially gone; eventually, they (or what is left of them) will be swallowed by a larger bank.
scav
The Chypriot govt contributed to the baddness, it did not innitiate it all, the raid on savers was baked in. Some details on the meeting.
BArry
@Cargo: “Bitcoins are the only currency that is safe. ”
Why? (please stick to real reasons)
BArry
@burnspbesq:
“If somebody has to take it in the shorts as a result of management foolishness, shouldn’t it be the shareholders? ”
Then the German shareholders would look at their investment bankers and ask pointed questions. Better to f*ck everybody else over, and hope not to bring the system crashing down.
BArry
@jl: “@jl: To amplify. what deposit insurance is adequate depends upon the probability of bank insolvency. That probability in European periphery is not independent of German, (Germany influenced) ECB, and (Germany influenced) Eurozone policies. ”
From what I’ve gathered, Cypriot (the Greek part) banks had lots of exposure to Greece (surprise!).
BArry
@Michael Finn: “WTF is wrong with the Euorpeans? I’m sorry but they have had a currency crisis for what, four years? Now they want to extend it for another couple of years? ”
I’m convinced that what happened was that, with the Euro, the richer Northern European countries figured that it was safe to invest in Southern Europe. This resulted in a vast amount of hot cash going into those countries. This had a number of effects, one of which was massive bubbles, particularly in real estate. When the crash came, the Northern bankers had as their first, second and only priorities making sure that they didn’t lose anything. So they’ll bring the system down before they admit to any losses, and they’ll happily impoverish Southern Europe for a generation.
jl
@patroclus: Thanks for the info on deposit insurance in Cyprus. From what you said, I think the way the bailout and the insolvency resolution is structured is very inequitable, especially for those with relatively small bank deposits in Cyprus.
darms
@Comrade Mary: “Cypriot banks paid an average 4.45% on deposits of less than two years in January compared with 4.25% in 2008, according to data from the Central Bank of Cyprus. The European Central Bank slashed rates to 0.75% from 4% in the period and German banks lowered theirs to 1.5 percent from 4.01%.”