Company: Goltsblat BLP
Category: Credit Risk
Published: 25 April 2013
When the recent Cypriot banking crisis ensued, the European Union presented a bailout package which it hoped would stabilise Cyprus's economy - but it had a price. In return for 10 billion Euros, Cyprus had to agree to the seizure of up to 40% of each deposit over 100 thousand Euros in Laiki Bank and Bank of Cyprus. There also had to be a partial or complete ban on overseas transfers of funds from deposits in Cyprus banks. In March 2013, the Cypriot Supreme Court granted three injunctions with the aim to fairly compensate the depositors who are at risk of having money seized. It is estimated that Russian citizens have over 20 billion Euros deposited in these to banks. So how do these developments impact Russian depositors and their substantial fortunes?
This white paper reviews the three new injunctions. It provides an analysis of how these injunctions will affect Russian depositors and their funds. You will also learn how Cyprus plans to tackle this crisis and what their likely future holds.