Azerbaijan, Baku, April 3 / Trend, A. Akhundov /
The Cyprus crisis will have an impact on the banking system of Azerbaijan, manager of the Baku Interbank Currency Exchange (BBVB) Farhad Amirbayov says.
"We have a sound belief that the Cyprus crisis will not affect Azerbaijan. I think it's quite a heady assessment. The effects will be observed, and they will be huge. One should not forget that Cyprus has been a part of the Euro zone since 2010, and, accordingly is no longer an offshore," Amirbayov told Trend.
According to him, first of all, from now on, the credibility and reputation of international banks has been destroyed. Bank deposits, which have always been considered [even if not very profitable] the most reliable option for savings, are no longer trusted. However, in his opinion, it will not affect the situation with confidence in bank deposits in Azerbaijan.
"However, after the destruction of the security aspect under international law [the events of the last three years], the economic aspect was destroyed as well. De facto private property is no longer sacred. Appeal to the Western courts for protection of the rights will bring nothing except for high expenditures," Amirbayov says.
As previously reported, Cypriot authorities made the unprecedented decision under anti-crisis measures to confiscate 80 percent of large deposits in local banks. Among the CIS countries, the most affected are private investors from Russia and Kazakhstan that may lose about $3.5-4 billion and over one billion euros, respectively.
According to the BBVB head, confiscatory model solution to the Cyprus problem will not be an anomaly.
"Chairman of the Eurogroup of finance ministers of the EU countries Jeroen Dijsselbloem told Thomson-Reuters and the Financial Times that the scheme to rescue banks at the expense of private investors will become a model for future aid packages in the Euro area. Incidentally, we observe not a very noticeable, but a very important substitution of concepts. Owners of deposit accounts are identified as investors. And the attitude towards investors has recently become, to put it mildly, disrespectful," Amirbayov said.
The BBVB manager predicts growth of protectionism and collapse of the global economy into many pieces during the next phase of crisis.
"The globalization era of the world economy is completed, including due to the fall in aggregate demand. The scale of the crisis clearly illustrates the fact that this is not a cyclical crisis, but a crisis of the fall of the efficiency of capital, which will inevitably lead to a reduction in the level of division of labor, and as a consequence, to the collapse of global markets into the so-called currency areas. Already, some states (China, Russia and Turkey) are trying to form their own currency zones, markets and economic clusters. At the next stage we are awaiting the growth in protectionism and collapse of the global economy into many pieces. And then the question arises: perhaps in search of a post-oil economic model of Azerbaijan it is necessary to focus on the development of relations with the closest neighbors? That is, to choose a coordinate system in which we will not get lost," Amirbayov said.