Cyprus banks stay shut after bailout

In a shock statement, the central bank of Cyprus said it will keep banks shut until March 28 after world markets took fright at the implications of the 10-billion-euro bailout deal the government has struck with International Monetary Fund (IMF) and European Union (EU). Previously, the the Central Bank said all Cyprus banks except for its two biggest lenders, those worst-hit by the financial crisis, would reopen March 26 after a 10-day lockdown for fear of a run on deposits. The agreement with IMF and EU averts a chaotic eurozone exit for the island, and spares all depositors with less than 100,000 euros ($130,000) in the banks. Cyprus could now be in for a “deep recession caused by the shrinkage of the banking sector,” an economist said.


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