ECONOMY

Greek banking system at risk if depositors at Cypriot branches had suffered haircut, says Stournaras

Finance Minister Yannis Stournaras has told Parliament that Greece’s banking system would have been in danger of collapse if a deposits haircut had been applied to savings at Cypriot branches in Greece.

“It wouldn’t be an exaggeration to say that during the two crucial days, our banking system was in danger,” Stournaras told MPs as he defended the government’s decision to push for the sale of Cypriot banks in Greece to a local lender.

“If deposits at Cypriot branches in Greece had suffered a haircut, nobody knows what would have been the consequences.”

The units of Bank of Cyprus, Cyprus Popular Bank and Hellenic Bank were bought by Piraeus Bank for about half a billion euros.