Cyprus : Lawmakers contemplate haircut refund

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Last Monday, lawmakers appeared to be welcoming the idea of initiating a fund to compensate investors and depositors who lost money in the 2013 banking crisis. The lawmakers agreed to discuss the idea at the House Finance Committee, alongside Finance Minister, Harris Georgiades, this Monday the 6th of November.

The bill proposal was presented in July by Disy head Averof Neophytou and presidential candidate and chairman of the Citizens’ Alliance Giorgos Lillikas. It proposes setting up a fund for compensation for bondholders and depositors of the now nonexistent Laiki Bank and of the Bank of Cyprus, which lost nearly EUR €10 billion in total during the haircut on deposits in 2013.

Giorgos Panteli, a representative of the finance ministry, was present at the committee meeting, stated that proposal “appears to present some constitutional, legal and economic complications”. Panteli went on to say that he would discuss with Georgiades of what was said at the committee meeting in order to decide how the ministry would respond.