The government has a great interest in seeing Bank of Cyprus getting back on track the soonest possible and serve as the steam engine of growth helping thus the country to overcome the financial crisis is currently facing, Deputy Government Spokesman Victoras Papadopoulos said on Wednesday.
Papadopoulos said that the issue of the Bank of Cyprus concerns the government as this is the biggest bank on the island and it is expected that it will be the steam engine in the effort to exit the financial deadlock.
Excluded from international capital markets since April 2011, Cyprus applied for financial assistance from the EU bailout mechanism, as its two largest banks, Bank of Cyprus (BoCY) and Cyprus Popular Bank (Laiki) requested state support following mammoth losses as a result of the Greek sovereign debt haircut.
In late March this year, the Cypriot authorities and the Troika (European Commission, European Central Bank and the IMF) agreed on a €10 billion financial assistance package which provided for a haircut on uninsured deposits at the BoCY and Laiki. Laiki is being wound down and merged with BoCY. Capital controls have been imposed on the island’s banking sector following the agreement.