Morgan Stanley is worried that Cyprus sets a precedent

Morgan Stanley is concerned that in the medium term a precedent is now set and it’s no longer taboo to haircut deposits or even to apply levies. The bank says that there is now more than one ‘unique’ country with ‘unique’ problems addressed in a ‘unique’ way. Implementation risks, especially on the political and social fronts, are considered to be substantial and in the near term Morgan Stanley is concerned by a possible Greek style recession.

Cypriot finance minister Michalis Sarris has said that Cyprus will do whatever it takes to stay in the euro.

You can watch Allister Heath's analysis of the Cyprus bailout in this week's Counterpoint video.