Cypriots have taken a significant haircut losings a significant portion of their deposits. Without the new deal, all depositors would have lost funds. By striking a deal at least depositors with under $100,000 will be “fully guaranteed”.

Cyprus, with the agreement of Eurozone finance ministers, dodged a disorderly sovereign default and unprecedented exit from the euro by bowing to demands from creditors to shrink its banking system in exchange for 10 billion euros (equivalent to $13 billion US) of aid to prevent its banking system collapsing and keep the country in the eurozone. All Cyprus banks will remain closed until Thursday, the central bank has announced in a shock statement. Continue reading →