Nicosia acts to shore up Cypriot bank

Article reported that the cash-strapped Cypriot government was to underwrite fully a €1.8bn share capital increase by Cyprus Popular Bank in a move to shore up the island’s second-largest lender and head off further 'contagion' from the Greek debt crisis.

The move, approved by the cabinet on the 17 May 2012, underlined Cyprus’s financial exposure to Greece and made it more likely it would become the next eurozone member to require an international bailout.

Cyprus had been shut out of international capital markets since 2010 and was already running desperately low on funds.

ESO: Background information: Cyprus replaces bank head amid crisis http://www.europeansources.info/record/cyprus-replaces-bank-head-amid-crisis/

Kathimerini, 14.5.12: Cyprus Popular in capital-strengthening talks with gov't http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_14/05/2012_442105

Kathimerini, 15.5.12: Greek storm makes waves in Cypriot credit system http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_15/05/2012_442301

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