Brussels, 15/05/2013 (Agence Europe) - Although restrictions on the movement of capital were introduced in Cyprus after the financial aid programme was agreed upon recently, large sums of money had been withdrawn in the preceding weeks, explains a report for Cypriot parliamentarians by Laiki and Bank of Cyprus (BoC) that has been seen by Reuters.
In a single fortnight, €3.6 billion was withdrawn in Cyprus by people with substantial bank deposits and most of the cash taken out of the country. An analysis by Reuters shows that after the Eurogroup meeting on 4 March, where the head of Eurogroup, Jeroen Dijsselbloem, refused to rule out the possibility of savings being raided as part of the country's bailout plan, €315 million was withdrawn from the country's two biggest banks, BoC and Laiki.
According to reports in Cyprus Mail, the Cypriot central bank is due this Friday to substantially ease the restrictions on the movement of capital.
Cyprus sets a precedent, says S&P. Credit rating agency Standard and Poor's says that the raiding of savings to bail out Cyprus' banks set a precedent. Standard and Poor's says in a report: “We believe that the events in Cyprus highlight the increased reluctance of financially stronger eurozone countries to make their taxpayers' funds available to recapitalize banks outside their home jurisdictions.” (EL/transl.fl)