Cyprus Financial Crisis: A simple explanation

Up until a week ago, investors were in euphoria because stocks were reaching new all-time highs. On March 14, 2013, the Dow Jones closed at a record 14,539.14 — a level not seen since pre-subprime mortgage crisis of 2007. Philippine stocks, meanwhile, continued its upsurge, ending at its all-time best of 6,835.21 on March 7, 2013.

And then last week, the market reversed. After reaching a new all-time high, the Dow Jones slid and was unable to return to record levels. The Philippine Stock Exchange index suffered a decline and, as of yesterday, registered its eighth consecutive day of losses.

What happened, you ask? Blame it on the Cyprus financial crisis.

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