1363837754_2013-03-18t163742z_1654742452_lm1e93i19gj01_rtrmadp_3_eurozone-cyprus-banks-pic4_zoom-1000×1000-38694As the value of assets has deteriorated from the recession in Cyprus, Moody’s rating agency has issued a statement stressing that potentially Cypriot Cooperatives and Banks could face capital needs that exceed € 1.5 billion. Due to the prolonged recapitalization needs Moody’s keeps the island’s banking system outlook on negative. Moody’s also commented that the prolonged recession will further deteriorate the operating environment as the system as a whole is already under enormous stress. Moody’s forecast for Cyprus’s GDP is anticipated to contract by 12%in 2013 and a further 6.4% in 2014. The consequences of the above events can lead to an exceptional high loan loss provision which ultimately will require the banks recapitalization needs to need further funding as Moody argues above.