According to a Cyprus Central Bank official, Bank of Cyprus depositors that have amounts above Eur100,000 in the bank can sustain losses of up to 60% value. This was confirmed by an official of the Finance Ministry.
The two officials spoke on condition of anonymity saying that the depositors would lose 37.5% of value from their deposits above Eur100,000 after the money is converted into bank shares. Another 22.5% would be lost depending on the assessment by officials who would determine the exact figure to be retained by the depositor. This would make the depositor an instant shareholder of the bank.
This is in line with the agreement entered into by the Cypriot government in order to secure Eur10 billion of US$12.9 billion in loans from the EuroZone and the IMF. The specific condition was that large depositors in the country's two largest banks, namely Bank of Cyprus and Laiki Bank, accepts across the board losses in order to pay for the bailout package.
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