DAILY FINANCE / AP: Big depositors at Cyprus’ largest bank may be forced to accept losses of up to 60 percent, far more than initially estimated under the European rescue package to save the country from bankruptcy, officials said Saturday.
Deposits of more than 100,000 euros ($128,000) at the Bank of Cyprus will lose 37.5 percent in money that will be converted into bank shares, according to a central bank statement. In a second raid on these accounts, depositors also could lose up to 22.5 percent more, depending on what experts determine is needed to prop up the bank’s reserves. The experts will have 90 days to figure that out…
The savings converted to bank shares would theoretically allow depositors to eventually recover their losses. But the shares now hold little value and it’s uncertain when — if ever — the shares will regain a value equal to the depositors’ losses… (more)
EDITOR: The ‘swoosh’ one hears in Europe is euros being transferred from deposits in Greece, Italy, Spain and Portugal to accounts in Germany, Switzerland, Austria and France.
