Cyprus became the latest euro zone domino to teeter in 2012 just when the worst of the crisis appeared to be over. In March 2013, a compromise rescue plan backed by euro zone finance ministers called for Cyprus to wind down one largely state-owned bank, Popular Bank. The raid on Popular Bank was intended to raise most of the 5.8 billion euros that Cyprus was required to raise as part of the bailout.
Bank of Cyprus chairman quits post
The chairman of Bank of Cyprus tendered his resignation yesterday following the appointment of an administrator to oversee the downsizing of the island's largest lender as a condition of a euro zone bailout, reports said.
This comes as thousands of students and hundreds of bank workers protested in the Cypriot capital Nicosia as banks stayed shut to stop a run on deposits after the island agreed a painful bailout to avert bankruptcy.
Andreas Artemis complained that the government had failed to inform the bank's management of either the appointment of Dinos Christofides or of the sale of the bank's branches in Greece, news website Stockwatch said.
The Central Bank of Cyprus issued a statement later stressing that the administrator had been appointed not to wind up Bank of Cyprus, as is happening with second lender Laiki, but to recapitalise it.
"The appointment of temporary special administrators at both banks aims to facilitate and complete the process of resolution and restructuring of Laiki Bank and Bank of Cyprus respectively," the statement said.
"Regarding the Bank of Cyprus, the mission of the special administrator is primarily to process its recapitalisation procedure. In any case, the resolution process is not synonymous with the liquidation process," it added.
All of Cyprus's banks remained closed for an 11th day yesterday after the central bank put back their planned reopening until tomorrow.
The bailout agreed in Brussels in Monday hits investors with deposits of over €100,000 (HK$1 million) at both Bank of Cyprus and at Laiki., the island's number two lender.
Around 1,500 students marched in the capital Nicosia against the bailout deal while security guards were stationed outside bank branches for the first time during the crisis.
Additional reporting by Reuters