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Cyprus Bail Out
On Monday, 25th March 2013, the Cypriot President Nicos Anastasiades and the "troika" of EU, European Central Bank and IMF leaders agreed the terms for the Euro 10 bln bail-out for Cyprus. The key terms of the agreement and of the proposed implementing Cyprus legislation are as follows:
• All deposits of less than 100,000 euros will be secured in accordance with the Deposit Protection Scheme of the Cyprus Government (“Protected Deposits”).
Laiki (Cyprus Popular) Bank
• Laiki (Cyprus Popular) Bank will be split into "good" and "bad" banks. The good assets will be merged into Bank of Cyprus. The bad assets will be liquidated over the time.
• The Protected Deposits with Laiki (Cyprus Popular) Bank will be frozen until they are transferred to the Bank of Cyprus. The timing for the transfer is yet to be announced. After the transfer, the Protected Deposits will become operative subject to the exchange control restrictions to be imposed by the Central Bank of Cyprus from time to time.
• The deposits exceeding 100,000 euros (“Unprotected Deposits”) with Laiki (Cyprus Popular) Bank will remain with that Bank and will be subject to the liquidation.
Bank of Cyprus
• The existing Protected Deposits with Bank of Cyprus and the Protected Deposits transferred to the Bank of Cyprus from Laiki (Cyprus Popular) Bank will be operative subject to the exchange control restrictions imposed by the Central Bank of Cyprus from time to time.
• The Unprotected Deposits with Bank of Cyprus will remain frozen until the recapitalisation of the Bank of Cyprus. The timeframe for the recapitalization is yet to be announced. These deposits will be subject to the 30% to 40% deposit levy on the amounts exceeding 100,000 euro.
• No restrictions will apply to the Protected Deposits and Unprotected Deposits with other banks. However, it will not be possible to move the existing Protected Deposits and Unprotected Deposits from Laiki (Cyprus Popular) Bank and Bank of Cyprus to other banks for the time being.
For the smooth functioning of the entire banking system all banks in Cyprus remain closed until Wednesday, 27 March 2013 included. Please note that Monday, 1st April is a public holiday in Cyprus.
We regret for any inconvenience these developments may be causing and we will keep informing you of all developments. We are ready to assist in any possible way through our head quarters in Cyprus or our offices in other jurisdictions.
Disclaimer: The information above is for general information and should not be relied on for any commercial or investment decisions.