Johny Abuaitah, Managing Director of Windsor Brokers follows up on the previous statement detailing 3 types of Cypriot forex brokers, and reminds everybody about the bigger picture.
Here is the text sent from Windsor:
“Before we talk about Cyprus, it is important to bear in mind that banks worldwide became involved in two successive global crises, starting with the derivative-mortgage crisis that originated from the USA in 2008 and Europe’s sovereign bonds crisis. The financial markets went into panic as many banks worldwide were stuck with bad investments and over 4 trillion dollars went into stabilization of banks and stimulus initiatives.
As a consequence of Europe’s bonds crisis, two local banks in Cyprus were stuck with bad investments and required financial assistance. These were not the first two banks and will not be the last to do so worldwide. We saw similar bailouts to major banks in the USA and Europe in the past 4 to 5 years.
Obviously, depositors and shareholders of the two local Cypriot banks suffered the consequences. However, investors who held funds below the amount of 100,000 Euros were protected in accordance with EU regulations.
As an EU member state with a significant geographic location, a favourable tax/legal system and advanced communication channels and infrastructure, Cyprus has been a high caliber services and business friendly center for many years.
There are two types of businesses in Cyprus; businesses that focus on the local market and international businesses that focus on foreign markets. International companies located in Cyprus mainly provide banking, shipping, insurance and investment services. These companies have continued their operations normally and were not directly affected as they were not linked to the local market but to many countries worldwide.
Windsor Brokers Ltd. is a licensed and regulated international investment firm. We were one of the first brokers to have been established and officially regulated in the Republic of Cyprus and have been active in the financial markets for the past 25 years. Windsor was also recently ranked by CySec as the number one broker with the highest capital reserves among all regulated FX brokers in Cyprus.
Our real strength however as a company lies in our structured internal risk management policies. Thanks to many pre-established risk management policies, Windsor was not affected by the Cyprus bailout or the collapse of several important banks over the past decade. The optimal aim of our risk management policies is to ensure safety of client funds and that our operations can continue running normally under different circumstances, without compromising the quality and efficiency of our products, services and customer support.
As part of our risk management policies, client and company funds are held in segregated accounts in 11 first class banks over a geographically widespread area. Windsor did not hold any funds with the two banks in question in Cyprus. This policy allowed us to conduct our business as normal, even on Sunday the 17th of March – a day after they announced that banks would close for a certain period of time.
At Windsor, clients were able to trade and make transfers whether deposits or withdrawals to and from their trading accounts as usual, without any delays or limitations.
The main concern should therefore not only be based on a country and/or its banks as such.
The real question that investors should ask themselves is not whether Cyprus and its banks are safe, but rather if the firm they are dealing with actually has a solid pre-established risk management framework.
That is a company’s safety net during tough times. After all, even if a broker located outside of Cyprus held funds in one of the two banks in question, they would have still been affected by the bailout.
At Windsor, thanks to our risk management policies and procedures, we are in a position to provide our clients and business introducers with a safe, ethical and reliable trading environment. Moreover, we are constantly taking up challenges to launch new products and services as well as innovative ways of trading that will best meet the expectations of our valued customers.”