Panel Urges Cypriot Bank Deposit Guarantees

NICOSIA, Cyprus (AP) – A commission of experts said that the Cypriot government should offer a guarantee on all bank deposits when it removes limits on money flows in order to maintain confidence in the financial system. The restrictions – including a ban on cashing checks and a daily withdrawal limits of 300 euros – were imposed in March after Cyprus agreed on a bailout plan with other Eurozone countries and the International Monetary fund. They were needed to avoid a run because, as part of the 10 billion-euro ($13.6 billion) bailout, uninsured depositors were forced to take massive losses on their savings in the two largest banks. The Independent Commission on the Future of the Cyprus Banking Sector said the state guarantee is “the best way forward” to help restore trust in the crushed banking sector and to attract foreign investment needed to get the economy out of recession.