Cyprus Deal Reached: 40% seizure on accounts over 100,000 EurosSubmitted by Michael Nystrom on Sun, 03/24/2013 - 21:21
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SYDNEY (MarketWatch) — Cyprus reached a deal early Monday that would enable it to receive funds from its European and international lenders to prop up its ailing banking sector and prevent its exit from the euro zone, reports said.
The cash-strapped island nation agreed a deal with the European Central Bank (ECB), the European Commission and the International Monetary Fund — collectively known as the Troika — to secure 10 billion euros ($13 billion) of aid, the reports said, citing European Union officials.
Reuters reported that the proposed agreement would include the closure of the country’s second-largest lender, Popular Bank of Cyprus or “Laiki Bank,” with deposits under €100,000 to be shifted to the larger Bank of Cyprus. Deposits over €100,000 at Laiki would be frozen and used to pay off debts, it said.
Separately, Agence France-Presse reported that, as part of the agreement, the country will impose a 40% haircut on Bank of Cyprus depositors holding more than 100,000 euros in their accounts.
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