Cyprus central bank extends shutdown to avoid bank run

Central bank in Nicosia, Cyprus / TourinNicosia

NEW YORK Banks in Cyprus will not open before Tuesday at the earliest as government officials try to find a new plan to stave off financial ruin, the central bank's spokeswoman said Wednesday.

Aliki Stylianou said the banks would remain shut for another two days, Thursday and Friday. Monday is a national bank holiday in Cyprus.

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The cash-strapped lenders have been closed since Saturday, when Cyprus said it would raid bank deposits to help fund its international bailout package, to avoid a bank run.

The Parliament this week rejected the plan to take a portion of bank deposits, leaving the country's bailout plan in doubt.

Cypriot officials are looking for alternative ways to scrounge up the 5.8 billion euros ($7.51 billion) that the country's euro area partners and the IMF expect in order to loan another 10 billion euros.

The money is needed to shore up the ailing banks and government finances. Without the funds, Cyprus' banks could collapse, the government would struggle to pay its bills and the country could become the first to be forced out of the European single currency.

By Wednesday night, there were still no details on what a Plan B might entail. Finance Minister Michalis Sarris was in Moscow seeking help from Russia, including an extension on a loan extended in 2011.

Representatives of Cyprus' potential international lenders - the IMF, European Central Bank and European Commission, known as the troika - met with the country's president and other top officials to discuss the next steps.

An official with knowledge of the negotiations said the troika was pressing for the country's two top lenders, Laiki and the Bank of Cyprus, to be shut down definitively. The official, who spoke only on condition of anonymity because they were not authorized to speak about the negotiations, said there was no Plan B yet.

[Anonymousg64]

BUY BITCOINS NOW!
before they hit 1,000,000USD/BTC!

[SantaFean]

Wait a minute...didn't CNBC, CBS, NBC, ABC and all the rest say that this is nothing to worry about? Why would people want to take their money OUT of the bank when the bank is insured, right? What? It is insured but not if the BANKS take the money? Oh, well that is different. BANK RUNS WILL HAPPEN. Of course the banks will do like Argentina...captial controls where you can only take out a few bucks...say 400 Euros. NO "digital" money will come out either. Now this can never happen in America where the tax payer or saver is asked, er...TOLD that they have to bail out the banks. Ha-f'ing-ha! Now do you understand what value paper money has? Argentina, Venezuela and now Cyprus. Remember Mexico devaluing the Peso? BAM! You lost at least 40% of your "money" in ONE DAY...to help out the goverment pay back their debt in "cheaper" money. See how that works? Here we just print, print, print.....do you know the outcome? What? You have not been paying attention...don't worry you will know someday...when it is way, way too late. Those folks with "money" in the bank in Cyprus have learned THEIR lesson, for sure!