The Eurozone finance ministers have decided and agreed as part of the bailout measures for Cyprus a haircut of 10% on all depositors funds (6.7% for deposits under 100k). This essentially means that savers will lose 10% of their savings that are deposited in any Cypriot banks.
This anouncement has caused an outrage in Cyprus espscially since the recently elected Cyprus president Nicos Anastasiades promised during his presidential campaign that he will not accept or sign any agreements that will affect deposits. Accodring to his recent statements ,which can be found here,this was considered as the least painfull measure for Cyprus as it will not further affect any jobs or the future.
The depositors have rushed to the ATM and the banks to withdraw their deposits. This decission was anounced Saturday morning where banking institutions are closed and a bank holiday on Moday and a decission is pending if they will open on Tuesday.
Fear all over Europe for a similar measure , has now been caused due to this with depositors in Spain, Greece, Italy protesting and hence significant volatility is expected in the Euro.
HOW DOES THIS AFFECT YOU AS A TRADER?
A lot of FX Brokers maintain offices in Cyprus. The reason for this is due to the fact that Cyprus is considered a tax heaven,due to its low tax rate, and hence an FX Broker by establishing an office in Cyprus can perform its global online operations while enjoying this low tax .
Regulated brokers are required by law to maintain client funds in segregated accounts in banks. Therefore you should check if your broker maintains some of your money in a Cyprus bank and what actions will be taken to ensure your money is safe. If the broker maintains your money in outside banks ,even thought the broker is Cyprus based, then this will not affect you at all.