Mar 25, 2013
By Scott Walker
A series of tense, last-ditch negotiations has saved the island nation of Cyprus from bankruptcy.
A package of rescue loans will prevent a collapse of the island’s banking system.
Euro zone finance ministers approved a 13-billion dollar bailout.
The head of the International Monetary Fund, Christine Lagarde, calls it a laborious but good result.
But it isn’t good news for people who hold large deposits in the two largest Cypriot banks. Deposits under 100,000 Euros are secured, but larger deposits will be frozen and taxed up to 40% to pay off debts and stabilize the rest of the banking system.
Many of those unsecured deposits are from wealthy Russians.
News of the bailout acted like a tonic on the international financial markets.