Bloomberg informed on Sunday that last of restrictions on international transfers are about to be lifted on April 6, almost a year after domestic capital controls ended in May 2014.
“The lifting of the restrictions confirms the full restoration of confidence in the banking system, the significantly improved business climate and essentially marks the return of the economy to normal conditions” Cyprus government spokesman Nikos Christodoulides stated for Bloomberg.
Deposits have been shrinking during the period, reaching €46.5B in February this year, in comparison with €67.5B during the same month in 2013. Standard & Poor’s informed that lifting the controls may put the stability of deposit levels at risk.
It is already two years since Laiki Bank and Bank of Cyprus became insolvent and were in need of a bailout. Both banks took critical steps with EU when freezing all withdrawals and boosting thus run on them, while subjecting depositors to a ‘haircut’ of up to 60% on all deposits in exchange for shares in the banks. Due to such measures it was called 'bail-in'.
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