Cyprus Readies Capital Controls to Avert Bank Run
Wednesday, 27 Mar 2013
Cyprus is finalizing capital control measures to prevent a run on the banks by depositors anxious about their savings after the country agreed to a painful rescue package with international lenders.
Cypriots have taken to the streets of Nicosia in their thousands to protest against a bailout deal they fear will push their country into an economic slump and cost many their jobs.
European leaders said the deal averted a chaotic national bankruptcy that might have forced Cyprus out of the euro.
With banks due to reopen Thursday, Finance Minister Michael Sarris said he expected the control measures to be ready by noon on Wednesday: “I think they will be within the realms of reason,” he said, without going into details.
“Banks will open on Thursday … We will look at the best way to limit the possibility of large sums of money leaving, and not imposing punitive conditions on the economy, businesses and individuals,” Sarris said in a Cyprus television interview.
The central bank governor said earlier that “loose” controls would apply temporarily to all banks. Earlier, the finance minister said they could be in place for weeks. Banks have been shut since final bailout talks got under way in mid-March.