Troika talks ongoing over haircut (UPDATED)

Unconfirmed reports claim that troika and the Cyprus authorities have agreed on the level of the ‘haircut’ of the uninsured deposits of BoC (over EUR100.000) at 47,5%.

A TROIKA delegation, currently in Cyprus to assess the island’s rescue package, continued its negotiations Saturday over the final figure of the haircut for uninsured deposits of the Bank of Cyprus (BoC).

Saturday morning, the delegation held consultations at the Finance Ministry, in the presence of Central Bank officials.
Talks were suspended around noon and resumed in the afternoon, with the aim of reaching an agreement by day’s end.
According to sources, negotiations also continued in order to reach an agreement on the interest to be imposed on the cooperative banking institutions for the €1.5 billion estimated for recapitalisation.

Cyprus and its international lenders (the European Commission, the European Central Bank and the IMF) agreed late March on a €10 billion bailout programme, which provided a haircut on uninsured deposits in the island’s two largest banks.

Cyprus Popular Bank has been wound down with its assets and insured deposits absorbed by Bank of Cyprus, which is currently under a consolidation procedure. The bailout was coupled with strict capital controls which economists say hamper economic activity.

The Troika mission has been in Cyprus since July 17 to assess the implementation of a Memorandum of Understanding (MoU) on the basis of the international rescue programme. It will depart from the island at the end of July.

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