Bank of Cyprus Executes Depositor bail-in By Carolyn Bewley
Savers in the Bank of Cyprus took a hit on Sunday as 37.5pc of their uninsured deposits were converted to equity as part of the island’s €10bn (£8.4bn) rescue deal.
The so-called ‘bail-in’ forces savers to foot the bill for the recapitalisation of Cyprus’ biggest bank, after it was hit by massive losses from its exposure to debt-crippled Greece.
Bank of Cyprus said it had converted 37.5pc of deposits exceeding €100,000 into “class A” shares, with an additional 22.5pc held as a buffer for possible conversion in the future.
Another 30pc would be temporarily frozen and held as deposits, the bank said.
The bail-in is part of attempts by Cyprus to find €13bn – a figure nearly double the island’s original bill – to shore up its economy. Other measures include a possible sell-off of the nation’s gold reserves.
The European Union and the International Monetary Fund are providing a further €10bn to the island, one of the eurozone’s smallest economies.
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