Europe

Cyprus Working to Open Banks Tomorrow, Controls Ready Soon

Cyprus’s lenders have been closed since a March 16 plan by the European Union to force losses on all depositors in exchange for a 10 billion-euro bailout touched off a political upheaval.

Cyprus is preparing to publish details of the capital controls it will apply to prevent a deposit flight when banks reopen after being shut for almost two weeks, the central bank’s spokeswoman said.

“The draft of the controls is complete and we expect that by the afternoon we will be in a position to brief the public,” Central Bank of Cyprus spokeswoman Aliki Stylianou said in comments broadcast on state-run CyBC today.

The controls may include a ban on cashing checks and carrying more than 3,000 euros ($3,830) in cash across borders, Phileleftheros reported today, citing a draft Finance Ministry decree. The measures will last for seven days from when the decree is published and apply to all accounts and payments regardless of currency, the Nicosia-based newspaper said.

Cyprus’s lenders have been closed since a March 16 plan by the European Union to force losses on all depositors in exchange for a 10 billion-euro bailout touched off a political upheaval. While parliament rejected that plan, a subsequent agreement shuts Cyprus Popular Bank Pcl (CPB), the nation’s second-largest lender and imposes larger losses on uninsured depositors.

The restrictions aim to protect the country’s financial industry, while simultaneously trying to uphold as far as possible the principle of free movement of capital within the EU, Stylianou said.

Parliament last week gave wide-ranging powers to the central bank governor, Panicos Demetriades, and Finance Minister Michael Sarris, including the ability to limit daily withdrawals, restrict wire transfers among the branches of the same bank and force the renewal of time deposits upon maturity.

Phidias Pilides, the head of Cyprus’s Chamber of Commerce and Industry, said he received assurances there will be no internal restrictions on the movement of capital. Restrictions will focus on foreign transactions, Pilides told reporters after a meeting with President Nicos Anastasiades and Finance Ministry officials in Nicosia today.

To contact the reporters on this story: Georgios Georgiou in Nicosia, Cyprus at ggeorgiou5@bloomberg.net; Natalie Weeks in Athens at nweeks2@bloomberg.net

To contact the editors responsible for this story: Maria Petrakis at mpetrakis@bloomberg.net; Jerrold Colten at jcolten@bloomberg.net

Anthony-Claret Onwutalobi
Anthony-Claret Onwutalobi
Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC and CEO of Portia Web Solutions. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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