EC on latest developments in Cyprus

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Cyprus clinched a last-ditch deal with international lenders on 25 March to shut down its second largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians, in return for a €10-billion bailout.

Under the deal, Cyprus Popular Bank will be closed and its guaranteed deposits of up to €100,000 transferred to the biggest bank, Bank

of Cyprus.

Deposits of more than €100,000 at both banks, too big to enjoy a state guarantee, will be frozen, and some of those funds will be exchanged for shares issued by the banks to recapitalise them.

The big depositors will lose money, but the authorities say deposits up to €100,000 will be protected, a reversal from an earlier plan that would have hit small depositors as well but was vetoed by Cyprus's parliament last week.

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