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Wednesday, March 27, 2013

Cyprus Imposes Capital Controls


Not-so-fun times for residents. From Reuters:
The east Mediterranean island fears a stampede at banks almost two weeks after they were shut by the government as it negotiated a 10 billion euro ($12.78 billion) bailout package with the European Union to escape financial meltdown.The rescue deal is the first in Europe's single currency zone to impose losses on bank depositors, raising the prospect that savers will panic and scramble to get at their cash.
Authorities insist that strict rules imposed to prevent a bank run will be temporary, but economists say they will be difficult to lift as long as the economy is in crisis.

... Strict controls, contained in a Finance Ministry decree, limit cash withdrawals to no more than 300 euros per day, ban the cashing of cheques and bar businesses from transferring money abroad unless they can show it is for imports.
The island's central bank will review all commercial transactions over 5,000 euros and scrutinize transactions over 200,000 euros on an individual basis. People leaving Cyprus can take only 3,000 euros with them.
Once your money is in a bank, it is no longer your money.

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