Brussels, 21/01/2013 (Agence Europe) - In a report published on Friday 18 January 2013, Deutsch Bank says that a writedown of Cypriot bonds held by private sector investors (PSI) would not be successful because it would not yield much in terms of profits and there would be the danger of a domino effect. The solution could come from income generated by privatisation or, in the worst case scenario, direct recapitalisation of the country's banks by the European Stability Mechanism (ESM).
In an interview with French newspaper Le Monde, German Finance Minister Wolfgang Schaüble said that tackling money-laundering is one of the reforms Cyprus will have to introduce in return for financial aid. The full Cypriot bank recapitalisation requirements are not yet known, but the Cypriot Central Bank announced on Saturday 19 January that the assessment by US auditors PIMCO was still under way. The outgoing head of the Eurogroup, Jean-Claude Juncker, said upon arrival at a meeting of the eurozone finance ministers on Monday 21 January that the eurozone would not be able to agree on a bailout plan for Cyprus until March. (EL/transl.fl)