Cyprus banks re-open with limits

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NICOSIA, Cyprus — Banks in Cyprus reopened for the first time in nearly two weeks today and prohibited people from withdrawing all their savings and triggering further chaos in the country’s financial system.

The limits on transactions, which include caps on withdrawals and money leaving the country, are a first in the 14-year history of the euro.

Across Cyprus, large but orderly lines formed ahead of the opening of banks for six hours from noon, and guards from private security firms reinforced police outside some ATMs and banks in the capital, Nicosia.

People filed calmly into banks across the country once they had opened, and no crowd issues were reported.

The country’s president, Nicos Anastasiades, expressed his “warm gratitude and deep appreciation towards the Cypriot people for the maturity and spirit of responsibility they have shown at a critical time for the stability of the Cypriot economy,” a statement from his office said.

Banks have been shut since March 16 to prevent people draining their accounts as politicians scrambled to come up with a plan to allow Cyprus to qualify for $12.9 billion in bailout loans for its stricken banking sector.

The deal was finally reached in Brussels early Monday, and imposes severe losses on deposits of over $128,400 in the country’s two largest banks, Laiki and Bank of Cyprus. Laiki will be broken up, with its good assets being absorbed by Bank of Cyprus. The exact amounts of the losses have not yet been officially announced.

According to European Central Bank figures, deposits in Cyprus’s banks slipped 2.2 percent last month, to $59.5 billion, the lowest figure since May 2010 and down from a peak of $64.8 billion in May 2012. The figure excludes deposits from other banks and the central government.

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