Friday, February 28, 2014
Cyprus One Year After Bank Bail-In — the Canary That Lived
Wall Street Journal
February 28, 2014
Cyprus was the canary in a coalmine of European bank breakdowns, the country’s president, Nicos Anastasiades, told The Wall Street Journal in an interview this week.
Last March, Mr. Anastasiades oversaw the unprecedented overhaul of his country’s banking sector in exchange for €10 billion in financial assistance from the euro area and the International Monetary Fund.
Now, almost one year later, he’s trying to put it all behind him. But it’s difficult, and the state of the financial industry in Cyprus, once its crown jewel, makes it ever more so.
“The system had to be tried in a country that wouldn’t cause systemic problems to the rest of the euro area,” Mr. Anastasiades said in his office in Nicosia. “That’s why the bail-in was implemented ring-fencing the branches in Greece, to stop the virus from spreading and create repercussions to the rest of the system.”