Cyprus Gains More Time To Achieve Surplus
Under the terms of the bailout deal, the country' second largest bank, Laiki, is to be split up, with its nonperforming loans and toxic assets going into a "bad bank." The healthy side will be absorbed into the Bank of Cyprus.
Big Laiki depositors could lose as much as 80 percent of their money.
Bank of Cyprus savers will lose 37.5 percent and possibly 22.5 percent more, depending on what experts determine over the next 90 days is needed to prop up that bank's reserves. The remaining 40 percent of big deposits at the Bank of Cyprus will be "temporarily frozen for liquidity reasons," but continue to accrue existing levels of interest plus another 10 percent.
Cyprus has long attracted many large Russian depositors, but a senior Cabinet member in Moscow said Monday that his government won't protect individual Russian victims of the Cypriot economic crisis.Regarding businesses, Stylianides said Monday that his government's negotiators will seek to soon give them access to the frozen 40 percent of their deposits in the Bank of Cyprus in order to get the country's moribund economy going again as soon as possible. "What we're striving and hoping for is that as of tomorrow morning that 40 percent is freed up so that we can return to some semblance of normal business activity," Stylianides told reporters. He said the details have to be hammered out by Thursday when the eurogroup officials meet to discuss the Cyprus deal. Cypriot banks also will sell their foreign operations under the agreement. For instance, the Bank of Cyprus in Romania said Monday it is immediately suspending operations at its 10 branches for a week until it's sold. Bank spokeswoman Liana Voinescu She said ATM machines will remain open, with customers able to withdraw a daily maximum of 4,000 lei (910 euros).
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