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Cyprus 'to limit funds that can be taken abroad' | |
(about 1 hour later) | |
Cyprus may be set to impose a limit on the amount of money that can be taken out of the country, one of its main newspapers has reported. | |
The Kathimerini newspaper also said that authorities would impose a ban on cashing cheques, as the government prepares to announce capital controls on the banking sector. | |
The central bank said the report was only based on draft proposals. | |
Earlier on Wednesday, the boss of the Bank of Cyprus was sacked. | |
Cyprus is introducing capital controls as it seeks to raise 5.8bn euros ($7.4bn; £4.9bn) to qualify for a 10bn-euro bailout from the European Union, European Central Bank and the International Monetary Fund, the so-called troika. | |
Depositors in Cypriot banks with more than 100,000 euros could see 40% of their funds converted into bank shares, while those with less than 100,000 euros will not lose any funds - but face limits on what funds they can access. | |
The exact details of the capital controls are expected to be finalised later on Wednesday. | |
Speaking to the Financial Times, Cypriot Finance Minster Mr Sarris said that the controls would be reviewed after seven days, and that some banks could be exempted altogether. | |
Bank merger | |
Bank of Cyprus chief executive Yiannis Kypri confirmed he had been removed as head of the bank, which is the country's largest commercial lender. | |
Reuters reported that Mr Kypri had issued a statement about his removal, which said: "The reason I was given was that, based on the resolution decree recently passed by parliament and upon demands of the troika, an administrator had been appointed at the Bank. | |
"Until now I have not received a formal letter from the governor of the Central Bank on the matter." | |
A European Commission spokesman denied that the troika had demanded Mr Kypri's removal. | |
"These reports are not correct and decisions like this would any case be the responsibility of the Bank of Cyprus," a Commission spokesman said. | "These reports are not correct and decisions like this would any case be the responsibility of the Bank of Cyprus," a Commission spokesman said. |
An administrator has been appointed to Bank of Cyprus to restructure the bank. It is being merged with the "good" parts of the failed Laiki Bank, which will be closed down. | |
Bank of Cyprus chairman Andreas Artemis handed in his resignation on Tuesday, along with four other directors, but the bank's board rejected the resignations. | |
Now Panicos Demetriades, the central bank governor, has sacked the entire board, according to the Cyprus News Agency. | |
Demonstrations | |
Mr Demetriades was widely criticised on Tuesday for suggesting that Bank of Cyprus was going to be wound up in the same way as is planned for Laiki Bank. | Mr Demetriades was widely criticised on Tuesday for suggesting that Bank of Cyprus was going to be wound up in the same way as is planned for Laiki Bank. |
His comments led to demonstrations, calls for his resignation from Bank of Cyprus staff, and a hastily-drafted denial from Finance Minister Michalis Sarris. | His comments led to demonstrations, calls for his resignation from Bank of Cyprus staff, and a hastily-drafted denial from Finance Minister Michalis Sarris. |
Mr Demetriades said "superhuman" efforts were being made to get the banks ready for reopening on Thursday. | Mr Demetriades said "superhuman" efforts were being made to get the banks ready for reopening on Thursday. |
"Indications are that banks will open tomorrow with some restrictions on capital," said central bank spokeswoman Aliki Sylianou, speaking to the country's state broadcaster on Wednesday. | "Indications are that banks will open tomorrow with some restrictions on capital," said central bank spokeswoman Aliki Sylianou, speaking to the country's state broadcaster on Wednesday. |
The banks have been shut since 15 March while the controversial 10bn-euro bailout was being negotiated. | The banks have been shut since 15 March while the controversial 10bn-euro bailout was being negotiated. |