'Superhuman' Effort Under Way in Cyprus

Authorities scrambling to get capital controls in place
By Kate Seamons,  Newser Staff
Posted Mar 27, 2013 7:34 AM CDT
'Superhuman' Effort Under Way in Cyprus
An employee of the Bank of Cyprus stands in front of the gate of Cyprus central bank and holds a banner that read in Greek "Demitriades go home" during a protest in Nicosia, Cyprus.   (AP Photo/Petros Karadjias)

(Newser) – Banks are set to open tomorrow in Cyprus, and that's not a task as easy as just unlocking the doors. As the AFP reports, a "superhuman" effort is under way to ready the banks in time, per the central bank governor. He made the comment yesterday, and not exactly to cheers: Some 200 employees of Bank of Cyprus, the country's largest lender, protested outside his office, clamoring for his resignation. One head that did roll, according to the BBC: The bank's chief executive, Yiannis Kypri, who was reportedly fired this morning. Meanwhile, authorities are scrambling to put in place capital controls designed to prevent a bank run.

The AP spoke with an anonymous banking official who shared some of the as-yet unannounced details: The controls will likely be in place for a week, he says, though the finance minister yesterday described the time frame as "a matter of weeks," and Bloomberg predicts they could persist for years, as they have in Iceland. While huge money transfers will not be permitted, some easing is expected; daily withdrawal limits may rise from $130 to $386, and payroll payments will get the green light. As for the still undefined levies, the Wall Street Journal shares the latest: Large Bank of Cyprus depositors are still rumored to be looking at a 40% cut; the largest deposit holders at No. 2 bank Cyprus Popular (also called Laiki), which is to be shut down, may only be able to recoup 20% of their funds—and it could take several years to do so. (Read more Cyprus stories.)

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