Daily Archives: April 2, 2013

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Finance Minister resigns

Finance Minister Michael Sarris said resigned on Tuesday and was replaced by Labour minister Haris Georgiades.

Sarris’ resignation followed the conclusion of talks with foreign lenders on a bailout that forced the island to impose heavy losses on bank depositors in return for aid.

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NEW Central Bank: Changes to capital controls – unofficial translation

The Central Bank of Cyprus issued today (Tuesday) the following decree specifying further changes to capital controls. The text was translated by the Central Bank. Changes are highilighted in text.


 The Enforcement of Restrictive Measures on Transactions in case of Emergency Law of 2013

Decree as per articles 4 and 5


WHEREAS there is lack of substantial liquidity and significant risk of deposits outflow with possible outcome the risk of the viability of the credit institutions with chain effects that could lead to instability of the financial system and have destabilizing consequences on the economy and society of the country as a whole,

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NEW: Cyprus to partially ease controls on financial transactions- cbank source

CYPRUS is expected to announce a partial relaxation of currency controls on Tuesday, raising the ceiling for financial transactions that do not require Central Bank approval to €25,000 from €5,000, a central bank source said.

Cypriot authorities have also decided, in consultation with international lenders, to unblock 10 per cent of a 40 per cent effective freeze on large deposits in Bank of Cyprus under a bail-in arrangement.

The bail-in sees another 37.5 per cent of deposits exceeding €100,000 converted to equity in the bank and an additional 22.5 per cent used as a buffer which could, if circumstances warrant it, also be converted to equity.

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Crisis probe will investigate me: Anastasiades

PRESIDENT Nicos Anastasiades yesterday denied that money transferred out of Cyprus by some of his relatives just before a controversial EU decision to raid bank deposits took place because he had given them advance warning of a haircut on savings.
“I never knew, and it was never possible for me to wage war until Saturday morning [March 16] to avoid what they imposed on us and at the same time supposedly tip-off people,” Anastasiades said yesterday.
He said that the three-member investigative committee set up to probe the banking sector and possibly allocate civil, criminal or political responsibility for Cyprus’ financial crisis will also be instructed to investigate himself and his family.

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OUR VIEW: What do we really have to lose by keeping capital controls in place?

IF THERE is one thing we can say with a large degree of certainty, given how bailout terms and conditions are changing every day, is that the Cyprus we knew has been annihilated.
The two big banks that financed our affluent lifestyle have collapsed, and the Bank of Cyprus, which will be allowed to survive, will be operating under so many restrictions and debilitating debts that it will be unable to fund business activity, let alone growth.

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Government finalises position ahead of final deal

HAVING inherited a mess of an economy that very nearly bankrupted the country, the government is now trying to extract the best possible final terms of a bailout agreement with the troika of international lenders this week, the government spokesman said yesterday.
“Having inherited an atomic bomb, the government managed to neutralise it and in doing so saved the country from total bankruptcy,” government spokesman Christos Stylianides told reporters yesterday after a Cabinet meeting.
Stylianides said they were focusing on restarting the economy. Representatives of the Central Bank and Cabinet were due to meet last evening to finalise the government’s position ahead of a final consultation with the troika expected on Wednesday, Stylianides said.

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Measures announced to boost economy

THE government will soon approve measures aimed at boosting the crippled economy, that are expected to include casinos, fast-tracking permits for large projects, tax breaks, and relaxation of measures to encourage foreign investment.
“I have already made some announcements but the essence of the measures will be decided by the cabinet,” President Nicos Anastasiades said yesterday.
The president said the government’s drive would focus on incentives for growth.
Anastasiades outlined the government’s intentions in an interview he gave on Sunday.
The first would be to fast-track permits concerning pending large projects, aiming to at least give the okay within 30 days.

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New era for Bank of Cyprus

THE measures to restructure and recapitalise the Bank of Cyprus (BoC) have solidified its position as the island’s biggest lender, marking a new era, it said yesterday.
“The restructuring and recapitalisation of BoC follows the decisions of the Eurogroup and aims at creating a well-capitalised, healthy and resilient bank, able to serve the needs of its customers and support the Cypriot economy,” BoC said in a statement.
The lender has significantly strengthened its capital position, minimised its exposure to the Greek economy and has access to European Central Bank liquidity, it said.
The bank was recapitalised by bailing-in depositors – a deposit-to-equity conversion – that ensured BoC now has a core tier 1 ratio of 9.0 per cent, the statement said.

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Details of the Central Bank measures

The Central Bank of Cyprus issued on Saturday clarifications of the resolution measures implemented under the Resolution of Credit and Other Institutions Law, 2013 at the Bank of Cyprus and Laiki Bank.

The resolution measures already adopted are:
(a) The sale of Laiki Bank’s branches in Greece to Piraeus Bank in Greece
(b) The sale of Laiki Bank’s business in Cyprus (excluding the bank’s subsidiaries and branches abroad) to the Bank of Cyprus.
As a result of the above, all contracts are transferred to either the Bank of Cyprus or Piraeus Bank.
Furthermore, all branches of Laiki Bank will resume as normal today, 2 April 2013 together with their staff, but under the ownership of the Bank of Cyprus.

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