Cyprus Bailout Fueling Bank Funding Concern on Bond Losses
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The European Union’s decision to recapitalize Cypriot banks by inflicting losses on depositors and senior bondholders is triggering investor concern that bank funding across the region will be hurt.
Cyprus qualified for its 10 billion-euro ($13 billion) bailout by agreeing to close Cyprus Popular Bank Pcl, also known as Laiki Bank, the island’s second largest lender, the EU said in a statement. Uninsured depositors and senior bondholders will be “bailed in,” staying in a so-called bad bank.