Greek Crisis Leaves Cyprus Mired in Debt
Greece, because of its proximity to Cyprus and a common language, had seemed a logical place for Cypriot banks to expand by extending loans to Greek businesses and consumers and loading up on Greek government debt. The shaky state of Cypriot banks and government finances threatens to add another name to the list of euro countries needing international bailouts.
NICOSIA, Cyprus. ("New York Times"). Michalis Sarris is not the only European banker working seven days a week, trying to scrape together enough capital to satisfy regulators and keep his institution afloat. But he may be the only one with the financial fate of his nation potentially hanging in the balance. Mr. Sarris, a 65-year-old onetime World Bank economist and former Cypriot finance minister, was drafted by bank regulators in January to take over as chairman of Cyprus’s largest financial institution, Cyprus Popular Bank, formerly known as Marfin Popular Bank. It is now his job to find investors willing to help put €1.8 billion, or $2.4 billion, in new money into the bank, which was devastated by its exposure to bad Greek debt.
Given the perilous state of the Cypriot economy, it is no easy assignment. And there is not much time left: Banks in Europe must demonstrate to the European Banking Authority by the end of June that they have enough capital to be viable.
Banks that cannot provide that evidence will face pressure to accept government bailouts or, in extreme cases, be shut down.
Mr. Sarris, a 65-year-old onetime World Bank economist and former Cypriot finance minister, was drafted by bank regulators
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