Banks in Cyprus closed for at least two more days

The banks in Cyprus will stay closed for two more days at least in order to prevent serious run in deposits. The local authorities hope that the system will start to function in a smooth manner again. Even when finally opened, the banks in Cyprus will be under strict control for keeping the financial system steady after the 10 billion Euro bailout. According to the Finance Minister of the country, the banks will have that control imposed for several weeks aiming to restrict the flow of money. The banks in Cyprus were closed due to an international rescue plan, according to which the two of the largest banks in the country need to be restructured. Their new policy will lead to serious losses for all the wealthy savers.

One of the banks to be restructured is the Bank of Cyprus, while the second one Laiki Bank has to be shut down. This was asked by the European Central Bank, the European Union and the International Monetary Fund in return of the bailout of 10 billion Euros. Those who have deposits in Laiki Bank will lose the savings above 100 000 Euros and those that have great sum s saved in Bank of Cyprus will be forced to contribute to the recapitalization of the bank. The crisis situation broke when the banking sector had grown eight times the country’s economy and the aim of the reforms now are for the banking sector in Cyprus to shrink. The banking sector in Bulgaria is stable, a fact that is backed with the new investors coming.