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Event Summary

At an AEI event on Tuesday, financial experts joined AEI’s Alex Pollock to discuss the lessons and wider implications of the banking crisis in Cyprus. Robert Eisenbeis of Cumberland Advisors outlined the developments in Cyprus relating to the European bailout, highlighting the proposed plans to tax both insured and uninsured depositors. Eisenbeis noted that while the resulting plan only taxed uninsured depositors, the resulting uncertainty weakened confidence in the eurozone’s banking sector.

AEI’s John Makin spoke out against the tax on depositors, arguing that the uncertainty resulting from the announcement conflicts with the need to ensure bank stability. Doug Elliott of the Brookings Institution agreed with the panelists that the plan to tax depositors was ill advised. He did, however, explain the decision in the context of geopolitical pressures, including the September elections in Germany, issues associated with bailing out Russian depositors, and the lack of effective political leadership in Cyprus.

AEI’s Desmond Lachman predicted that Cyprus would inevitably suffer from an imploding economy and would have to leave the euro. He concluded that Cyprus missed its best opportunity to leave the euro in March when there was a freeze on bank withdrawals and capital controls were being imposed in any case, no matter what.
–Andre Gardiner

Event Description

Although Cyprus is a small country with a small economy, it has caused melodramatic banking and political dilemmas. What is the connection between banking systems and credit to sovereigns, between the insolvency of governments and the insolvency of banks, between large inflows of foreign deposits and deposit insurance, and between banking failures and political instability? When or under what conditions should bank depositors suffer losses, and which depositors? How should the crisis in Cyprus have been handled differently, and what are its wider international repercussions going forward? These and other relevant questions will be addressed by our expert panel.

If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.


9:00 AM
Registration and Breakfast

9:15 AM
Robert Eisenbeis, Cumberland Advisors
Doug Elliott, Brookings Institution
Bert Ely, Ely and Co.
Desmond Lachman, AEI
John H. Makin, AEI

Alex J. Pollock, AEI

11:00 AM

Event Contact Information

For more information, please contact Emily Rapp at [email protected], 202.419.5212

Media Contact Information

For media inquiries, please contact [email protected], 202.862.5829.

Speaker Biographies

Robert Eisenbeis is the vice chairman and chief monetary economist at Cumberland Advisors, where he advises the company’s asset managers on US economic and financial market developments and their implications for investment and trading strategies. Eisenbeis was formerly executive vice president and director of research at the Federal Reserve Bank of Atlanta, where he advised the bank’s president on monetary policy for Federal Open Market Committee deliberations and was in charge of basic research and policy analysis. Previously, he was the Wachovia Professor of Banking at the Kenan-Flagler School of Business at the University of North Carolina at Chapel Hill. He has also held senior positions at the Federal Reserve Board and Federal Deposit Insurance Corporation. Eisenbeis is a member of the Financial Economists Roundtable and a fellow of the National Association of Business Economics.

Doug Elliott, a fellow in economic studies at the Brookings Institution, is a member of the Initiative on Business and Public Policy. He is an expert on the worldwide financial sector and its regulation; on corporate, state, local pensions; and on the eurozone and its economic and financial governance, including the eurozone crisis, which he has written extensively about in the US, Europe, and Asia. A financial institutions investment banker for two decades — principally at J.P. Morgan — he was the founder and principal researcher for the Center on Federal Financial Institutions. He is the author of “Uncle Sam in Pinstripes: Evaluating the US Federal Credit Programs” (Brookings Institution Press, 2011), the only comprehensive review of the federal government’s credit activities to be written in the last quarter century. He has researched financial institutions or worked directly with them as clients in a range of capacities, including as an equities analyst, credit analyst, mergers and acquisitions specialist, relationship officer, and specialist in securitizations. His work encompasses banks, insurers, funds management firms, and other financial institutions. In addition to 14 years at J.P. Morgan, Elliott worked as an investment banker with Sanford Bernstein, Sandler O’Neill, and ABN AMRO. He has testified before the US House of Representatives and US Senate and participated in numerous speaking engagements, and has  appeared widely in major media outlets.

Bert Ely is a financial institutions and monetary policy consultant based in Alexandria, Virginia. He has consulted on deposit insurance and banking issues since 1981. Ely continuously monitors conditions in the banking industry as well as monetary policy.  In recent years, he has focused on banking problems, the US housing and housing finance crises, the entire US financial system, and the resolution of the Fannie Mae and Freddie Mac conservatorships. More recently, he has advised clients on the implementation and consequences of the Dodd-Frank Act.  He also advocates for the enactment of a US-covered bond statute.  In addition, he is a co-inventor of the Ratchet Mortgage (patent pending). Ely first established his consulting practice in 1972.

Desmond Lachman joined AEI after serving as a managing director and chief emerging market economic strategist at Salomon Smith Barney. He previously served as deputy director in the International Monetary Fund’s (IMF) Policy Development and Review Department and was active in staff formulation of IMF policies. Lachman has written extensively on the global economic crisis, the US housing market bust, the US dollar, and the strains in the euro area. At AEI, Lachman focuses on the global macroeconomy, global currency issues, and multilateral lending agencies.

John H. Makin is a former consultant to the US Department of the Treasury, the Congressional Budget Office, and the International Monetary Fund. He specializes in international finance and financial markets (stock, bonds, and currencies including the euro and the US dollar). He also researches the US economy (including monetary policy and tax and budget issues), the Japanese economy, and European economies. He is the author of numerous books and articles on financial, monetary, and fiscal policy. Makin writes AEI’s monthly Economic Outlook.

Alex J. Pollock joined AEI in 2004 after 35 years in banking. He was president and CEO of the Federal Home Loan Bank of Chicago from 1991 to 2004. He is the author of numerous articles on financial systems and the organizer of the Deflating Bubble series of AEI conferences. In 2007, he developed a one-page mortgage form to help borrowers understand their mortgage obligations. At AEI, he focuses on financial policy issues, including housing finance, government-sponsored enterprises, retirement finance, corporate governance, accounting standards, and the banking system. He is the lead director of CME Group, a director of Great Lakes Higher Education Corporation and the International Union for Housing Finance, and chairman of the board of the Great Books Foundation.

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