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Cyprus' President Nicos Anastasiades has made an appeal to the leaders of international lenders to urgently lift controls on bank transactions in a letter made public on Tuesday.Restrictions on bank transactions were introduced with the aim of preventing a run on the banks after the Eurogroup and the International Monetary Fund forced a loss on major bank deposits to recapitalize the banking system on March 25.It was part of a 10 billion euro bailout the eastern Mediterranean island requested to shore up its economy.Anastasiades said the restrictions are drying up badly needed liquidity and instead of creating confidence in the banking system they are eroding it day by day.He also said artificial measures such as capital restrictions may seem to prevent a bank run in the short term,burberry, but will only aggravate the depositors,http://www.truereligionoutletstreams.com/, who are liable to lose up to 60 percent of their deposits over 100,beatsheadphonesbstd,000 euros and have the rest of their money largely blocked in the biggest lender Bank of Cyprus."Maintaining capital restrictions for a long period will inevitably affect the local economy,http://www.chloemaindesignermi.com/, will also affect the country's international business and will have an adverse impact on GDP,ghd," Anastasiades said.His letter was addressed to the chiefs of the European Central Bank (EC and the International Monetary Fund and to the presidents of the European Council and the Eurogroup. A government spokesman said the Cypriot Finance Minister Haris Georgiades will address similar letters to all of his European Union counterparts.The Central Bank of Cyprus said two weeks ago that the lifting of the restrictions were about to be announced, but a decree to that effect by the minister of finance was subsequently blocked by the troika -- the European Central Bank,http://www.isabelmarantshoesbsa.com/, the Eurogroup and the IMF -- as being premature.Anastasiades said the success of the entire bailout program for Cyprus depends upon the emergence of a strong and viable Bank of Cyprus,cheap beats by dre, the only major bank left.Under resolution measures,true religion outlet, Bank of Cyprus is being recapitalized by using its depositors money and was also forced to merge its operations with Cyprus Popular Bank,Isabel Marant Shoes, which is in the process of being wound down after receiving Emergency Liquidity Assistance (ELA) by the ECB totaling 9.2 billion euros in just 12 months.Anastasiades said in his letter that a possible long-term solution could be the conversion of part of Cyprus Popular Bank's ELA liability into long term bonds and the transfer of these bonds and corresponding assets into a separate vehicle."Still another solution could be the reversal of the Eurogroup decision in relation to the merger of good bank of Popular which including deposits up to 100,000 euros and 9.2 billion euros ELA liability into Bank of Cyprus," Anastasiades suggested.He also demanded that Bank of Cyprus should exit resolution status without any further delay and should be granted eligible counter-party status by the ECB.His letter came as most parliamentary parties came out in support of a suggestion for legal action to be taken against ECB chief Mario Draghi for allowing emergency liquidity assistance to be pumped into Cyprus Popular Bank at a time when it was evident it was becoming insolvent.Parliamentary leaders said allowing liquidity to be given to an insolvent banking institution was against ECB's rules.
In a speech at the Conservative Party Conference in Birmingham this past week, the Chancellor justified his plans by saying the economy was healing, but not as quickly as the coalition government had hoped.
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