Cypriot finance minister quits as inquiry begins

'Actions and omissions' that led to crisis will be investigated by judges

The move guarantees the cash of about 5 per cent or 750 of the 15,000 British savers in Laiki who held more than €100,000 (£84,500) in Cyprus’s second biggest bank, which is being wound up under the terms of an international rescue.

The deal sees British savings accounts and current accounts that are in credit transferred to the Bank of Cyprus’s UK subsidiary, which comes under the aegis of the Bank of England’s new Prudential Regulation Authority. Bank of England deputy Governor and PRA chief executive Andrew Bailey spent last week thrashing out a deal to protect savers.

Laiki Bank UK was a branch of the Cypriot bank rather than a subsidiary, meaning Britain was not obliged to protect its depositors. But the deposits have been transferred in full and will now come under the UK Financial Services Compensation Scheme, which protects the first £85,000 of British savers. Laiki depositors can continue to use the bank’s UK branches while the transfer takes place.

“All customers who had an account with Laiki Bank UK will be able to access funds as normal and do not need to do anything,” the PRA said. A spokesman for the Bank of Cyprus UK said: “This deal was a joint effort from both banks both here in the UK and in Cyprus, the regulator in Cyprus and the PRA to ensure that the 15,000 Laiki UK savers were transferred to Bank of Cyprus UK.”

Under the terms of the international bailout agreement for Cyprus, depositors with savings of more than €100,000 in Laiki and the Bank of Cyprus in Cyprus itself will lose up to 40 per cent of their savings to help pay for the country’s bailout. The beleaguered nation imposed capital controls to prevent a bank run.

The UK deal does not cover those customers with current accounts in overdraft. These accounts are now frozen at Laiki Bank UK and will not be transferred. Customers in credit will be transferred, but their overdraft facilities have been cancelled.

Laiki customers with mortgages and other loans have been switched to Bank of Cyprus and must deal with the Cypriot parent bank rather than the UK subsidiary.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Chiropractic Assistant

£16500 per annum: Recruitment Genius: A Chiropractic Assistant is needed in a ...

Recruitment Genius: Digital Account Executive - Midlands

£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Web Developer

£28000 - £30000 per annum: Recruitment Genius: This company provides coaching ...

Ashdown Group: Front-End UI Application Developer

£30000 - £40000 per annum + Benefits: Ashdown Group: Front-End UI Application ...

Day In a Page

Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own
Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

The secret CIA Starbucks

The coffee shop is deep inside the agency's forested Virginia compound
Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

How the Establishment closed ranks over fallout from Nessie 'sighting'

The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
One million Britons using food banks, according to Trussell Trust

One million Britons using food banks

Huge surge in number of families dependent on emergency food aid
Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

2,500 years of history in 3,000 amazing objects

Excavation at Italian cafe to fix rising damp unearths trove
The Hubble Space Telescope's amazing journey, 25 years on

The Hubble Space Telescope's amazing journey 25 years on

The space telescope was seen as a costly flop on its first release
Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

Did Lord Ashcroft quit the House of Lords to become a non-dom?

A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
Apple's ethnic emojis are being used to make racist comments on social media

Ethnic emojis used in racist comments

They were intended to promote harmony, but have achieved the opposite
Sir Kenneth Branagh interview: 'My bones are in the theatre'

Sir Kenneth Branagh: 'My bones are in the theatre'

The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
The sloth is now the face (and furry body) of three big advertising campaigns

The sloth is the face of three ad campaigns

Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
How to run a restaurant: As two newbies discovered, there's more to it than good food

How to run a restaurant

As two newbies discovered, there's more to it than good food
Record Store Day: Remembering an era when buying and selling discs were labours of love

Record Store Day: The vinyl countdown

For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

Mary J Blige and Will.i.am to give free concert

The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
10 best tote bags

Accessorise with a stylish shopper this spring: 10 best tote bags

We find carriers with room for all your essentials (and a bit more)
Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

Paul Scholes column

I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England