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Bank of Cyprus chief Yiannis Kypri 'sacked' Cyprus 'to limit funds that can be taken abroad'
(about 1 hour later)
The chief executive of the Bank of Cyprus has been sacked as part of a restructuring of the country's largest commercial lender. Cyprus may be set to impose a limit on the amount of money that can be taken out of the country, one of its main newspapers has reported.
In a statement Yiannis Kypri confirmed his removal, but said he had not yet received a formal letter. The Kathimerini newspaper also said that authorities would impose a ban on cashing cheques, as the government prepares to announce capital controls on the banking sector.
It was reported that his removal was requested by Cyprus' international lenders - the European Union, European Central Bank and IMF - the troika. The central bank said the report was only based on draft proposals.
But a European Commission spokesman has denied the reports. Earlier on Wednesday, the boss of the Bank of Cyprus was sacked.
An administrator has been appointed to the Bank of Cyprus (BoC) to restructure the bank. It is being merged with the "good" parts of the failed Laiki Bank, which will be closed down. Cyprus is introducing capital controls as it seeks to raise 5.8bn euros ($7.4bn; £4.9bn) to qualify for a 10bn-euro bailout from the European Union, European Central Bank and the International Monetary Fund, the so-called troika.
BoC chairman Andreas Artemis handed in his resignation on Tuesday, along with four other directors, but the bank's board rejected the resignations. Depositors in Cypriot banks with more than 100,000 euros could see 40% of their funds converted into bank shares, while those with less than 100,000 euros will not lose any funds - but face limits on what funds they can access.
Now Panicos Demetriades, the central bank governor, has sacked the entire board, the Cyprus News Agency reported. The exact details of the capital controls are expected to be finalised later on Wednesday.
However, the EU denied widespread reports that his removal was demanded by the troika as part of a resolution to Cyprus' financial crisis. Speaking to the Financial Times, Cypriot Finance Minster Mr Sarris said that the controls would be reviewed after seven days, and that some banks could be exempted altogether.
Bank merger
Bank of Cyprus chief executive Yiannis Kypri confirmed he had been removed as head of the bank, which is the country's largest commercial lender.
Reuters reported that Mr Kypri had issued a statement about his removal, which said: "The reason I was given was that, based on the resolution decree recently passed by parliament and upon demands of the troika, an administrator had been appointed at the Bank.
"Until now I have not received a formal letter from the governor of the Central Bank on the matter."
A European Commission spokesman denied that the troika had demanded Mr Kypri's removal.
"These reports are not correct and decisions like this would any case be the responsibility of the Bank of Cyprus," a Commission spokesman said."These reports are not correct and decisions like this would any case be the responsibility of the Bank of Cyprus," a Commission spokesman said.
Mr Kypri, who only took over as chief executive in 2012, said in a statement: "Until now I have not received a formal letter from the governor of the Central Bank on the matter." An administrator has been appointed to Bank of Cyprus to restructure the bank. It is being merged with the "good" parts of the failed Laiki Bank, which will be closed down.
Bank of Cyprus chairman Andreas Artemis handed in his resignation on Tuesday, along with four other directors, but the bank's board rejected the resignations.
Now Panicos Demetriades, the central bank governor, has sacked the entire board, according to the Cyprus News Agency.
Demonstrations
Mr Demetriades was widely criticised on Tuesday for suggesting that Bank of Cyprus was going to be wound up in the same way as is planned for Laiki Bank.Mr Demetriades was widely criticised on Tuesday for suggesting that Bank of Cyprus was going to be wound up in the same way as is planned for Laiki Bank.
His comments led to demonstrations, calls for his resignation from Bank of Cyprus staff, and a hastily-drafted denial from Finance Minister Michalis Sarris.His comments led to demonstrations, calls for his resignation from Bank of Cyprus staff, and a hastily-drafted denial from Finance Minister Michalis Sarris.
Open for business?
Mr Demetriades said "superhuman" efforts were being made to get the banks ready for reopening on Thursday.Mr Demetriades said "superhuman" efforts were being made to get the banks ready for reopening on Thursday.
"Indications are that banks will open tomorrow with some restrictions on capital," said central bank spokeswoman Aliki Sylianou, speaking to the country's state broadcaster on Wednesday."Indications are that banks will open tomorrow with some restrictions on capital," said central bank spokeswoman Aliki Sylianou, speaking to the country's state broadcaster on Wednesday.
The banks have been shut since 15 March while the controversial 10bn-euro bailout was being negotiated.The banks have been shut since 15 March while the controversial 10bn-euro bailout was being negotiated.
These capital controls could include a weekly limit on cash withdrawals, export limits on euros, and a ban on cashing cheques, Newsnight economics editor Paul Mason said on Tuesday.
In addition, fixed-term deposits will have to be held until maturity.
The restrictions are expected to be tighter for accounts at Bank of Cyprus and Laiki Bank.
The exact details of the capital controls are expected to be finalised on Wednesday.
Speaking to the Financial Times, Mr Sarris said that the controls would be reviewed after seven days, and that some banks could be exempted altogether.