Cyprus Bailout a Reality Check

After a period of what some experts have called “irrational exuberance” in global markets, the weekend decision by the euro zone to force bank depositors in Cyprus to contribute towards a bailout provided a stark reality check for investors on Monday.

Risk assets, including Asian equity markets, took a sizable hit with Japan’s Nikkei 225 and Australia’s S&P/ASX 200 down 2.7 and 2.1 percent, respectively. The euro/dollar also fell to $1.2890 down from $1.3054 late in New York on Friday.

Worries over the fallout from the proposed bailout for Cyprus are expected to dampen risk appetite as investors come to terms with the issues surrounding the island nation.


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