Grand Theft Bank: Cyprus and the 80% solution.
More confirmation on the 80% number from the WSJ last night.
After two attempts at securing a bailout deal in March that pushed Cyprus to the brink of exiting the euro, the country faces major obstacles. To secure the aid, it agreed to wind down its second-largest lender, Cyprus Popular Bank PCL, and radically restructure the largest, Bank of Cyprus PCL.
In the process, Cyprus became the first country in the three-year-long euro-zone crisis to hit depositors to fund its survival: Cyprus Popular's uninsured depositors will probably take losses of as much as 80% of their holdings over the guaranteed limit of €100,000; Bank of Cyprus depositors stand to incur losses of as much as 60% of their uninsured deposits, according to initial government estimates.
Cyprus's finance minister said Tuesday that large deposit holders at Cyprus Popular Bank, the island's second biggest lender, could face losses of as much as 80% on their deposits as the government moves to wind down its operations.
Speaking in a television interview with state broadcaster RIC, Michalis Sarris indicated that it could also take years before those depositors see any of their money returned.
"Realistically, very little will be returned," Mr. Sarris said.
Cyprus residents burn EU flags.
Laiki Bank employees protest at Cyprus parliament.
Bank employees demand Central Bank chief resign.