Cyprus experienced a banking crisis in 2013, but has since then implemented several measures to stabilize its banking system.
And now, a closer look
In 2013, Cyprus experienced a severe banking crisis, which was partly caused by the exposure of its banks to Greek debt. As a result, the government of Cyprus had to request a bailout from the European Union (EU) and the International Monetary Fund (IMF) in order to stabilize its banking sector.
Since then, Cyprus has implemented several measures aimed at strengthening its banking system, such as the establishment of a new regulatory framework, the recapitalization of its banks, and the imposition of stricter capital controls. As a result of these efforts, the country’s banking sector has been gradually recovering in the years following the crisis.
According to The Economist, “Cyprus has since put its house in order. The authorities have tightened up bank regulation and recapitalised the financial system.” Moreover, Forbes has reported that “Cyprus has impressed international institutions and investors with the speed and focus of its banking sector reform, which included debt restructuring measures and improved management of non-performing loans.”
Interesting facts on the topic:
- The 2013 Cypriot banking crisis was one of the worst in the country’s history, with some estimates suggesting that banks lost up to 80% of their value.
- The EU and the IMF agreed to provide a bailout of €10 billion to Cyprus in exchange for a series of economic reforms.
- As a result of the crisis, some of Cyprus’s largest banks were forced to merge or be acquired by foreign banks, such as Hellenic Bank and Bank of Cyprus.
- The crisis also led to a significant decline in the country’s GDP, which shrunk by around 25% between 2012 and 2015.
- Despite the negative impact of the crisis, Cyprus has made significant progress in recent years, with its economy now showing signs of recovery and growth.
- In 2019, Cyprus was ranked as the 64th freest economy in the world by the Heritage Foundation’s Index of Economic Freedom, ahead of many other European countries.
Year | Event
2013 | Cyprus experiences a severe banking crisis
2013 | Government requests a bailout from the EU and the IMF
2013-2014 | Cyprus implements measures to strengthen its banking system
2019 | Cyprus is ranked as the 64th freest economy in the world
A video response to “Is Cyprus in banking crisis?”
The financial crisis in Cyprus has caused global concerns, leading to Asian stocks slipping and worries about the future of the country. With the banks closed for a week, Cyprus is becoming a cash society and people are losing their jobs and facing the possibility of having nothing. The politicians need a $20 billion loan to save the country, and if there’s no bailout by Monday, the banks may never reopen.