(NICOSIA, Cyprus) — Wealthy depositors in the Bank of Cyprus could lose even more of their savings than initially expected.
According to BBC News, depositors with over 100,000 euros could lose as much as 60 percent of their money in order to pay for the bailout.
According to a statement from the bank, accounts that are over the 100,000 euro threshold will have 37.5 percent of their money converted into bank shares. Additionally, depositors could lose up to 22.5 percent more, depending on what experts deem necessary to support the bank’s reserves.
The remaining 40 percent would continue to accrue interest, however the interest would only be paid if the bank “performs well,” says BBC News.
The BBC report also states that depositors at Laiki — Cyprus’ second largest bank — could face even larger losses, though no details have yet been released. Laiki is expected to eventually be absorbed by the Bank of Cyprus.
European and Cypriot government leaders reached a bailout deal this past week that averted a bank collapse. The $13 billion bailout calls for shrinking the banking system.
Banks in Cyprus reopened on Thursday with strict limits on transactions on withdrawals and a ban on cashing checks. Long lines of citizens waited to access their money on Thursday, but by Friday the lines were significantly shorter.
Copyright 2013 ABC News Radio
Heather Long, CNN
Doug Criss, CNN
Kathryn Vasel, CNN