Banks will open again on Tuesday, March 26th 2013, Central Bank of Cyprus said Wednesday evening in a statement. This regulation will affect also the Cypriot banks subsidiaries in Greece: Bank of Cyprus, Popular (Laiki) Bank and Hellenik Bank.
Also Greek Finance Minister Yiannis Stournaras confirmed that the Greek subsidiaries will remain closed until March 26th, however he noted “this cannot go on forever” and revealed Athens had a “Plan B” for these Cypriot branches and stressed he could not reveal this plan, for the time being.
KTG advises Stournaras, he had better a plan B. Then KTG knows people who receive their salaries or pensions via the Cypriot bank branches in Greece. And they will be paid end of March…
ATMs in Cyprus and Greece are constantly fed with banknotes so customers can withdraw a limited amount of money.
Plans for capital restrictions
According to some local and international media claims, the Cypriot government considers plans to “freeze” deposits, restrict withdrawals and capital transfer, the moment the banks reopen again.
It is clear that re-opening the banks without an agreement for bailout and without limitations for deposits could be catastrophic.
Banks could collapse within hours, should customers withdraw their money.
Governor of Bank of Cyprus Panikos Dimitriadis told media, Cypriot banks could afford only 10% losses of assets, that is some 7.5 billion euro.
Capital in Cypriot banks
Based on data from IMF, the Institute for International Finance (IIF) said Wesdnesday,
Cypriot banks held 20 billion euros ($26 billion) in deposits by non residents at the end of September 2012, compared with 32.2 billion deposited by residents.
“Cyprus has allowed its banking sector to swell to the point where “by the end of 2012, its total assets amounted to 700% of GDP,” or gross domestic product”, an IIF research note said.
When the 13.1 billion euros raised by Greek subsidiaries of Cypriot banks and 4.5 billion euros deposited with other foreign subsidiaries were added to the non-resident figure, the foreign aggregate amounted to 37.6 billion euros, IIF noted.
BTW: We have been talking about Cypriot bank branches in Greece but how about Bank of Cyprus branches elsewhere? are they also closed?
PS think about it: there is a country with no economic activity whatsoever…
