Cyprus bank lending has restarted with significant restrictions, but the demise of the small country's financial infrastructure is sure to be followed in time with an exit from the Euro. I fail to see how it can restructure long term given its problems without changing and devaluing its currency.
The comparisons with Iceland and its bank crisis are marked.
My sympathies go out to those affected. The full disaster of the bank restrictions are as follows:
- Daily withdrawals limited to 300 euros
- Cashing of cheques banned
- Those travelling abroad can take no more than 1,000 euros out of the
country
- Payments and/or transfers outside Cyprus via debit and or credit cards
permitted up to 5,000 euros per month
- Businesses able to carry out transactions up to 5,000 euros per day
- Special committee to review commercial transactions between 5,000 and
200,000 euros and approve all those over 200,000 euros on a case-by-case
basis
- No termination of fixed-term deposit accounts before maturity
