April 2013 — update in regards to the banking system in Cyprus

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An unprecedented and controversial decision was taken by Eurogroup last week, in dealing with the recapitalisation of the two largest banks in Cyprus. Having been unable to recapitalise the two banks directly, Cyprus sought the support of the EU for obtaining a loan. As a result, resolution measures were taken in regards to the two banks as of 30 March 2013.

The resolution measures already adopted are:

  • The sale of Laiki Bank’s branches in Greece to Piraeus Bank in Greece 
  • The sale of Laiki Bank’s business in Cyprus (excluding the bank’s subsidiaries and branches abroad) to the Bank of Cyprus.

As a result of the above, all contracts are transferred to either the Bank of Cyprus or Piraeus Bank.

Furthermore, all branches of Laiki Bank resumed as normal on Tuesday, 2 April 2013 together with their staff, but under the ownership of the Bank of Cyprus…

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