Cyprus may enact new laws to prevent bank runs

Doubt over Cyprus’ financial future showed no sign of lifting Thursday, with officials reportedly set to introduce new legislation to try to prevent capital exiting the country, amid negotiations to shore up the country’s finances.

Laws to impose capital restrictions to stem deposit flight from the country and to set out new rules for insolvent banks will likely be put before the country’s parliament on Thursday, The Wall Street Journal reported.

The laws would be needed before the banks reopen their doors to customers — an event now reportedly to take place next Tuesday.

Banks have stayed closed this week after last Saturday’s announcement that a 10 billion euro ($13 billion) financial-aid deal between Cyprus and the Trioka — the Eurogroup, the European Central Bank and the International Monetary Fund — would require a one-time levy on bank deposits to raise €5.8 billion.

MarketWatch

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