As part of building the case, I have cataloged the benefits of transparency. One benefit is that it puts an end to crony capitalism.
Because sunshine is the best disinfectant.
It reveals each banks' detailed exposures and let's everyone know who is receiving preferential treatment. It is one thing to engage in a shady transaction behind the veil of opacity and quite another to engage in these transaction when both bank and recipient will be immediately identified.
Cyprus is a case study in why banks must provide ultra transparency and disclose their current global asset, liability and off-balance sheet exposure details so that crony capitalism ends (I understand this applies to Slovenia too - hat tip Yves Smith @ NakedCapitalism).
If Cyprus banks had been required to provide ultra transparency, do you think that the activities documented below by Keep Talking Greece (hat tip Anat Admati) would have occurred?
As I said, ending crony capitalism is one of the benefits of transparency.
A hotel company “affiliated to AKEL-PEO” had the total loan of €2,813,000 deleted in May 2012.Pancypriotic Labor Federation (PEO) had deleted 193,000 euro from a 554,000 euro loan in May 2012.Company «N.M.G.» “affiliated to AKEL official, had 110,000 euro being deleted from 1,830,000 euro loan in March 2007 and January 2008.Former DHSY MP paid back only 67,000 euro to a loan of 168,000 euro. The rest was deleted.A company belonging to brother of former DHKO minister paid back only 310,000 euro for a loan of 1,595,000 euro. The rest was deleted in May 2011.The son of former AKEL-minister had 2,000 euro deleted in May 2012. The total loan was 5,000 euro.
The most striking case seems to be this of a company of a famous politician in the Cypriot scene (owns 51% of company shares). He appears to have made a deal with COP to delete a loan 0f 5.8 million US-Dollars. The loan delete was planned for 2014.