Cyprus Announces Unprecedented Capital Controls
anamericanincyprus
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| Bank of Cyprus customers wait to be helped as banks reopened today after nearly two weeks |
Cyprus becomes the first member
state in the history of the EU to impose capital controls. The Minister of Finance and the Governor of
the Central Bank of Cyprus announced that in consideration the exceptional
circumstance, capital restrictions will be imposed as temporary measures to
regulate the flow of capital within and out of Cyprus in order to safeguard the
stability of the system.
Each customer
will be able to withdraw €300 in cash per day from each bank in which they have
an account;
Businesses will be able to carry out transactions up to €5.000 per day,
per account and pay staff salaries;
Payments and
or transfers outside the Republic, via debit and or credit and or prepaid cards
are permitted up to €5.000 per month, per person in each credit institution;
Cyprus Popular Bank (Laiki) has
been placed into administration and all insured deposits have been transferred
to the Bank of Cyprus.
To restore the health of the Bank
of Cyprus, the bank has been recapitalised to 9% based on the adverse scenario
by PIMCO. Insured deposits have been fully protected, uninsured deposits will
be partly retained as cash and partly converted into shares in the Bank of
Cyprus. The Bank of Cyprus will be privately
owned by its large depositors.
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