ECONOMY

Insurance firms and charities in Cyprus will suffer deposits haircut, says central bank

Cypriot insurance companies and charity organisations will be affected by a bail-in on deposits in an attempt to minimise the broader impact on savers, the island’s central bank has said.

The central bank said insurance companies, charities and private educational institutions would take a 27.5 percent impairment on their savings in Bank of Cyprus. Under a previous arrangement, they would have been excluded.

Under a deal for 10 billion euros (8.5 billion pounds) in aid from international lenders, Cyprus is winding down its second-largest bank Popular, while up to 60 percent of uninsured deposits exceeding 100,000 euros in Bank of Cyprus will be seized and converted to equity to bolster its capital levels.

[Reuters]