2012–2013 Cypriot financial crisis
The Cypriot fiscal-banking crisis that started in peaked in March of Cyprus became the fifth EU member state to request financial assistance from the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF), known collectively as the Troika. Because of the assistance, the most severe. The Cypriot Government Bailout Problem. The Cypriot Government could not bail out its banks due too high debt-to-GDP ratio & Cyprus' oversize banking sector. The people of Cyprus could not bail out its two failing banks - Bank of Cyprus and Laiki Bank (a.k.a. Popular Bank). The size of the Cyprus banking system at ˆ Billion over-shadows the nation's GDP at ˆ Billion.
The deal reached with euro partners and the IMF marks a radical departure from previous international aid packages. President Nicos Anastasiades defended it as a "painful" step, taken to avoid a disorderly bankruptcy. It had, he said what is a 10- 44 police code a statementbeen a choice between the "catastrophic scenario of disorderly bankruptcy or the scenario of a painful but controlled management of the crisis".
The Cypriot leader, who was elected last month on a promise to tackle the country's how to fix 504 gateway timeout nginx crisis, will address the nation on Sunday. Lenders are said to be gambling that the risk of a bigger banking crisis elsewhere in the eurozone has receded.
While Cyprus may be one of the eurozone's tiniest economies - its third-smallest - there could be serious repercussions for other financially over-stretched economies, such as those of Spain and Italy, BBC Business editor Robert Peston writes.
The point of the levy is to warn lenders to banks that they should take care where they place their funds, and avoid banks that overstretch themselves - as Cypriot banks did, he adds.
Cyprus is the fifth country after Greece, the Republic of Ireland, Portugal and Spain to turn to the eurozone for financial help during the region's debt crisis. The country has been in financial difficulties since the collapse of the Greek economy, where Cypriot banks had huge investments. It appears that the heavy presence of Russian money in Cypriot banks was a factor in imposing the levy. People in Cyprus with less thaneuros in their accounts will have to pay a one-time tax of 6. Reports suggest that depositors will be able to access all of their money except the amount set by the levy.
The levy itself will not take effect until Tuesday, following a public holiday, but action is being taken to control electronic money transfers over the weekend.
Co-operative banks, the only ones open in Cyprus on Saturday, closed after people started queuing to withdraw their money. At one what is cyprus bank crisis in the Limassol district, a frustrated man parked his bulldozer outside and threatened to break in. Maria Zembyla, from Nicosia, said the levy would make a "big dent" in her family's savings and "erode the investor confidence".
According to Reuters news agency, almost half of the depositors in Cyprus are believed to be non-resident Russians. There has also been speculation that Russia could help finance the bailout by extending a 2. European regulators and politicians are convinced that a vast amount of cash in Cypriot banks belongs to Russian money launderers, our business editor writes.
Few German politicians would vote for a Cyprus rescue that simultaneously rescued these launderers so the only way to make the bailout what is cyprus bank crisis to the German parliament was to tax the launderers, too, he says.
In Berlin, German Finance Minister Wolfgang Schaeuble called the levy part of the "fair" distribution of the bailout's burden. Savers could be seen queuing what is cyprus bank crisis cash machines amid resentment at the charge. Those with greater sums will lose 9. Depositors will be compensated with the equivalent amount in shares in their banks.
Russian money. Russians reacted angrily to the news of the levy on social media.
Aug 22, · How the Bank of Cyprus recovered from the economic crisis. Just six years ago, the Bank of Cyprus looked to be on the brink of collapse. The Mediterranean island’s largest lender was badly affected by the economic crisis that hit Cyprus in and led to the collapse of several of its competitors. The island’s economy was eventually bailed out to the tune of ˆ10bn ($bn) by the . Mar 21, · Cyprus Financial Crisis Worries Global Markets ABC News' Nick Schifrin reports from Cyprus where worry and anger is rampant. March 21, — -- There's a lot of talk this week about Cyprus, that tiny island in the Mediterranean that no one really thought about until a debt crisis there started to shake the world's financial markets. Mar 19, · In plain English, Cyprus has to make its depositors or its national central bank accept ˆ billion in losses -- and it can't make its national central bank take losses. So Germany is making.
Initial signs that big depositors in Bank of Cyprus would take a hit of 30 to 40 percent had already unnerved investors over the last week. In return they will get shares in the bank worth Laiki's assets will now be turned over to Bank of Cyprus. At Bank of Cyprus, about The remaining 40 percent will continue to attract interest, but will not be repaid unless the bank does well.
Banks reopened to relative calm on Thursday after the imposition of the first capital controls the euro has seen since it was launched a decade ago. There are no signs for now that bank customers in other struggling eurozone countries like Greece, Italy or Spain taking fright at the precedent set by the bailout.
Savings accounts in Europe are safe. European officials have worked hard this week to stress that the island's bailout was a unique case, after the clumsy suggestion by Eurogroup chairman Jeroen Dijsselbloem that the rescue would serve as a model for future crises rattled European financial markets. But then it will pay back the loan. Cypriot President Nicos Anastasiades said on Friday that the bailout had mitigated the risk of national bankruptcy and would prevent it from leaving the euro.
The island has seen none of the angry street violence that frequently erupts in Greece but peaceful protests by students and bank workers have become an almost daily occurrence.
At least 2, students protested outside parliament this week. Etyk, a bank workers' union, called a rally outside parliament for Thursday to protest against potential job cuts and a hit on their pension funds.
Among other things Cypriots and foreigners are allowed to take only up to 1, euros in cash when they leave the island. Join thought-provoking conversations, follow other Independent readers and see their replies. Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today. Please enter your email address Please enter a valid email address Please enter a valid email address.
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