After several hours the president of the republic of Cyprus Mr Nicos Anastasiades close a deal with the Euroroup in Brussels around 3:00am this morning. The president announced that Cyprus got a deal that is beneficial for the Cypriot people.
The deal is concentrated on the following:
- Restructuring of Bank of Cyprus and a haircut on its deposits above 100000 euro
- The percentage is not yet known (floating around 30%)
- The ELA debt of 9 billion euro of Laiki bank will be imposed on Bank of Cyprus
- Laiki Bank will close down
- Creation of “good bank” and “Bad bank”
Update – correction:
- Laiki bank will follow the good-bad bank road with the bad bank closing down eventually and the good bank will be merged with the Bank of Cyprus.
- The first installment from Troika will come in around 2 months.
- The 10 billion euro help will not be used to recapitalize bank institutions
- Bank of Cyprus will be recapitalized by a haircut on over 100000 euro deposits
- The European Central bank will provide liquidity to the Bank of Cyprus according to standard procedures