Sovereignty incident · inc-2013-cy-bail-in
Cyprus: bail-in of uninsured deposits at two banks, and restrictions on transactions
On 25 March 2013 the Eurogroup reached an agreement with the Cypriot authorities on an EU/IMF programme. Bank of Cyprus was recapitalised through a full bail-in of its shareholders and bondholders and the conversion of 47.5% of uninsured deposits (the part above EUR 100,000) into equity. Cyprus Popular Bank (Laiki) was resolved: its insured deposits moved to Bank of Cyprus, and its uninsured deposits stayed in a legacy unit, to be compensated from the liquidation of its assets. Deposits under EUR 100,000 were fully protected, and deposits of the central government and local authorities were exempt. Restrictive measures applied to cashing cheques, transfers abroad, domestic transfers above a set amount, cash withdrawals and exports, and opening accounts; payment card transactions and incoming payments from abroad were not restricted. The restrictive measures were abolished on 5 April 2015.
- When
- to
- Jurisdictions
- Cyprus
- Kinds
- Loss, Restriction
What happened
The incident begins.
The incident ends.
Forms of money
Who was affected: Depositors of Bank of Cyprus and Laiki for the part of their deposits above EUR 100,000, and the shareholders and bondholders of both banks. Bank customers in Cyprus were subject to the restrictive measures until April 2015.
Forms of money affected
Forms of money not affected
None listed for this incident.
Each form of money links to the Money in everyday life matrix, which compares their properties with sources.
Sources
Sources: European Central Bank, Press release: ECB's reaction to the Cyprus adjustment programme (25 March 2013); European Stability Mechanism (ESM), FAQ: Financial assistance for Cyprus (archived, not updated since September 2013); Republic of Cyprus, Ministry of Finance, Public Debt Management Office, Newsletter no. 8/2015 (April 2015)