Cyprus: ECB to help after top bank restructured

Cyprus president says ECB will prop up troubled banking sector once largest bank restructured

Associated Press
Cyprus: ECB to help after top bank restructured
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Cyprus' President Nicos Anastasiades speaks to reporters during a news conference on his first four months in office, at the presidential palace in the capital Nicosia, Friday, July 12, 2013. Anastasiades had little time to adjust to his new duties as he grappled with the cash-strapped country’s pressing financial crisis right from the start of his new presidency. Just three tumultuous weeks after taking office, Anastasiades signed 23 billion euro bailout deal with Cyprus’ euro area partners and the International Monetary Fund that decimated the country’s once-robust banking sector. In order for Cyprus to become eligible for a 10 billion euro loan, the deal imposed steep losses on large savers in the country’s two largest banks - the first time such losses were forced on depositors in the eurozone’s history. Moreover, restrictions on money transfers and withdrawals that were imposed to head off a run amid waning trust in the country’s banking sector remain largely in place. Meanwhile, the country’s economy is projected to shrink by more than 9 percent this year, while the jobless rate has exceeded 16 percent. (AP Photo/Petros Karadjias)

NICOSIA, Cyprus (AP) -- Cyprus' president says the European Central Bank will help prop up the country's hard-hit banking sector once its largest lender, Bank of Cyprus, is restructured.

Nicos Anastasiades said Friday that ECB Chief Mario Draghi didn't specify in a meeting last month how he will help. That will be decided after the restructuring is done.

Anastasiades warned Cyprus' international creditors that the bank's cash reserves were running dangerously low after a €23 billion ($30 billion) financial rescue deal forced it to shoulder billions in debt when it merged with parts of the country's now-defunct second-largest lender.

The deal also imposed major losses on large savers in the two biggest banks.

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