EU/IMF agreement with Cyprus: details

2013 03 27 | Category: News

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According to Cyprus Mail, the Central Bank of Cyprus and a statement issued by Eurogroup, the following things can be said about the future of the jurisdiction.

Cyprus, as well as its banks,  has avoided default. The Bank of Cyprus will be restructured and fully capitalized. The Bank of Cyprus will also take performing loans, insured deposits and other assets of Laiki Bank, as well as 9 billion euros of emergency liquidity assistance.

Eurogroup, in their statement, said that “the programme will contain a decisive approach addressing financial sector imbalances”. It is planned that the banking sector will reach an EU average in 2018.

Laiki Bank will be resolved with a full contribution from uninsured depositors, equity shareholders and bondholders. The remaining part from Laiki Bank which is not absorbed by the Bank of Cyprus (the so-called bad bank) will be gradually closed.

The European Central Bank will provide liquidity to the Central Bank of Cyprus.

All insured bank deposits will be protected according to the European Union legislation.
The bailout program money of 10 billion euros will not be used in order to recapitalize the above mentioned Laiki and Bank of Cyprus.

The person responsible for the restructuring of Bank of Cyprus will be Mr Dinos Christofides, while Ms Andri Antoniades will be overseeing the necessary changes in the Laiki Bank.

EditorEU/IMF agreement with Cyprus: details