once again RH, when you recapitalize a company and issue new shares, the money goes into the company. Much like when you setup a new company and buy its shares for the first time. Its not that complicated, 1bn Eur went into the bank of Cyprus from a NEW SHARE ISSUE. They weren't brought from other shareholders, the bank issued new shares, the hedge funds paid for them and the bank received the money as equity.
I have no problem with that explanation in that instance.
This is fresh cash injected directly into the economy via the bank which is probably one of the most direc ways of impacting an economy.
I also have no problem with that explanation.
Once again. The bank was RECAPITALISED, it ISSUED NEW SHARES, THE INVESTORS PAID THE BANK FOR THE SHARES not some other shareholder).
I agree! As I have said new shares bought equals a injection of money into the company, bank, economy .... whatever! Further transactions with those same shares do not create new investments.
That is exactly what I said. I have no difficulty understanding it ..... but I am talking generally NOT one specific example of the BoC. We were actually discussing the Noble Energy deal ..... not banking, The Boc example was really irrelevant. It was thrown in to demonstrate how the US was the number one investor in Cyprus which, according to Govt. figures to 2010 it is not. Russia is a far greater contributor to the Cyprus economy than the USA going on official government figures.
As a footnote: The contribution to the Cyprus economy by the UK pensioners living her is around 500m a year. So 'we' contribute about half as much as the US investment in BoC. The difference being that 'we' contribute that every year ..... not just a one off.
